Circular 23/2023/TT-BTC regime for managing, calculating depreciation and amortization of fixed assets

CIRCULAR

Guiding the regime for managing, calculating depreciation and amortization of fixed assets of authorities, organizations or units, and fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises

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Pursuant to the Law on Management and Use of Public Assets dated June 21, 2017;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

Pursuant to the Government’s Decree No. 151/2017/ND-CP dated December 26, 2017 on guidelines for certain Articles of the Law on Management and Use of Public Assets;

At the proposal of the General Director of the Department of Public Asset Management;

The Minister of Finance hereby promulgates the Circular guiding the regime for managing, calculating depreciation and amortization of fixed assets of authorities, organizations or units, and fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises.

Chapter I

SCOPE OF REGULATION AND SUBJECTS OF APPLICATION

Article 1. Scope of regulation

1. This Circular provides guidance on the regime for managing, calculating depreciation and amortization of fixed assets of authorities, organizations or units, and fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises, including:

a) Fixed assets of State authorities, public non-business units, units under the People's Armed Forces, agencies of the Communist Party of Vietnam and the Vietnam Fatherland Front and socio-political organizations.

b) Fixed assets which are office buildings, public service facilities of socio-political professional organizations, social organizations, socio-professional organizations and other organizations which are established in accordance with Clause 1, Article 69, Clause 2, Article 70 of the Law on Management and Use of Public Assets.

c) Fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises.

2. This Circular does not regulate:

a) Fixed assets under lease; fixed assets under custody, safekeeping, and storage on behalf of the State or other organizations and individuals.

b) Fixed assets that are special assets or special-use assets of units of the People's Armed Forces as prescribed in Clauses 1 and 2, Article 64 of the Law on Management and Use of Public Assets. The regime for managing, calculating depreciation and amortization of such assets shall comply with the specific regulations of the Minister of National Defense and the Minister of Public Security.

c) Infrastructure assets in national and public interests invested and managed by the State and assigned to managing entities in accordance with the law regulations on management and use of public assets.

Article 2. Subjects of application

1. This Circular applies to:

a) Authorities, organizations and units, including: State authorities, public non-business units, units of the People's Armed Forces, agencies of the Communist Party of Vietnam, the Vietnam Fatherland Front, and organizations assigned to manage fixed assets as prescribed at Points a and b, Clause 1 Article 1 of this Circular.

b) Enterprises assigned to manage fixed assets as prescribed at Point c, Clause 1 Article 1 of this Circular.

2. Socio-political organizations, social organizations, socio-professional organizations and other organizations, which are established in accordance with the law regulations, shall be encouraged to apply the regulations prescribed in this Circular, with the aim to manage, calculate the depreciation of, and depreciate/amortize fixed assets which are not prescribed in Clause 1, Article 69, Clause 2, Article 70 of the Law on Management and Use of Public Assets.

Chapter II

GENERAL REGULATIONS ON MANAGEMENT OF FIXED ASSETS

Article 3. Fixed asset standards

1. Identification of an asset:

a) Any asset independently used shall be identified as an asset.

b) Any system constituted by various separate parts interconnected to perform certain function(s), without any of which the entire system is unable to operate, shall be identified as an asset.

c) If a system constituted by various separate parts interconnected to perform certain function(s), which have various useful lives and function independently as well as must be managed separately, each of such parts shall be identified as an asset.

d) Any working animal or production animal shall be identified as an asset.

dd) Any orchard of perennial plants in an independent land plot or each perennial plant shall be identified as an asset.

e) Land use rights of each land plot, or an area allocated to an authority/organization/unit within each land plot, shall be identified as an asset.

g) Any intellectual property, which is registered or established with each certificate of copyright registration, certificate of copyright-related right registration, industrial property protection title, or plant variety protection title, shall be identified as an asset.

h) Each software or application shall be identified as an asset.

i) The brand of each public non-business unit shall be identified as an asset.

2. An asset prescribed in Clause 1 of this Article (other than any prescribed in Clause 3 of this Article) shall be identified as a fixed asset when it satisfies both of the following standards:

a) Its useful life is 01 (one) year or more.

b) Its original cost is VND 10,000,000 (ten million Vietnamese dong) or higher.

3. An asset as prescribed in Clause 1 of this Article of a public non-business unit that self-funds its recurrent expenditures and capital expenditures or an asset of the non-business unit that must fully include depreciation expenses of fixed assets into its service price in accordance with the law regulations or an asset of a public non-business unit, which is, for its life entirely, used for business activities, leased, or used in a cooperative joint venture without any new legal entity established in accordance with the law regulations, shall be identified as a fixed asset when it satisfies both of the following standards:

a) Its useful life is 01 (one) year or more.

b) Its original cost satisfies the standards applicable to enterprises regarding original cost of fixed assets.

Article 4. Classification of fixed assets

1. Classification based on physical properties:

a) Tangible fixed assets mean assets in physical forms which have independent structure, or systems composed of multiple separate parts interconnected to perform certain function(s), including:

- Type 1: Buildings and constructions, including: Offices; warehouses; auditoriums; clubs; community cultural houses; sports venues; conservation facilities and museums; kindergartens; pre-school facilities; workshops; classrooms; lecture halls; dormitories; clinics; convalescent homes; guest houses; houses; official residences, and other buildings and constructions.

- Type 2: Architectural structures, including: Warehouses, storage tanks, parking lots, drying grounds, playgrounds, swimming pools, bore wells, dug wells, fences and other architectural structures.

- Type 3: Cars, including: Official State cars, cars serving general work, special-use cars, cars serving State reception and other cars.

- Type 4: Other transport vehicles (other than cars), including: road vehicles, railway vehicles, watercraft, aircraft and other transport vehicles.

- Type 5: Machinery and equipment, including: Popular office machinery and equipment, equipment serving general operations of the authorities, organizations, and units; special-use machinery and equipment, and other machinery and equipment.

- Type 6: Perennial plants, working animals and/or production animals.

- Type 7: Other tangible fixed assets.

b) Intangible fixed assets mean assets which have no physical form and are created with investments by authorities, organizations, units or enterprises, or acquired during their operations, including:

- Type 1: Land use rights.

- Type 2: Copyrights and copyright-related rights.

- Type 3: Industrial property rights.

- Type 4: Rights to plant varieties.

- Type 5: Software and applications.

- Type 6: Brands of public non-business units.

c) Special fixed assets mean assets of which the costs of creation cannot be determined or the real value cannot be valuated, but strict physical management is required (such as: antiques, museum exhibits, tombs, classified historical sites, ancient documents, rare documents, etc.), including brands of public non-business units.

Depending on the actual situation and the requirements for management of the assets prescribed at this Point, the Ministers and Heads of ministerial-level authorities, Government-attached agencies and other central authorities (hereinafter referred to as Ministers and Heads of central authorities), People's Committees of provinces and municipalities (hereinafter referred to as provincial-level People’s Committees) shall promulgate the list of special fixed assets under the management of the Ministries, central authorities and local authorities (using Form No. 02 handed over in Appendix 02 to this Circular) for the purpose of uniform management.

2. Classification based on the origins of assets:

a) Fixed assets formed from procurement.

b) Fixed assets formed from investment and construction.

c) Fixed assets handed over or transferred.

d) Fixed assets given as donations/gifts or for the purpose of sales promotion (including cases where suppliers exchange old assets for new ones after a period of use in accordance with the manufacturers’/suppliers’ policies).

dd) Extra fixed assets detected after stocktaking (not tracked on accounting books).

e) Fixed assets received by public non-business units after the cooperative joint ventures expire as prescribed in Clause 6, Article 47 of the Government’s Decree No. 151/2017/ND-CP dated December 26, 2017 detailing a number of articles of the Law on Management and Use of Public Assets (hereinafter referred to as Decree No. 151/2017/ND-CP).

g) Fixed assets formed from other sources.

Article 5. Principles for managing fixed assets

1. All current fixed assets of authorities, organizations, units or enterprises shall be managed strictly regarding their physical states and values in accordance with the law regulations on management and use of public assets and other relevant law regulations. The items of original cost, amortization, depreciation, and residual value of fixed assets, as well as portion of brand value of public non-business units, allocated to cooperative joint venture expenses, shall be integers. In the case where such items, as the results show, are decimals, they shall be rounded by adding 01 to the respective integers.

2. Authorities, organizations, units and enterprises shall:

a) Create fixed asset cards and conduct accounting of all fixed assets currently owned by them in accordance with the applicable accounting procedures. Each fixed asset is identified as an accounting object on the accounting books.

b) Conduct annual stocktaking; adjust accounting figures if any discrepancies arise during the stocktaking process.

c) Report on the declaration, management and use of assets in accordance with the law regulations on management and use of public assets.

3. Whichever fixed asset has its depreciation fully expensed or is fully depreciated but remains useful shall continue to be managed, supervised, and preserved by the authorities, organizations, units or enterprises in accordance with the law regulations.

In the case where a fixed asset has its all depreciation fully expensed or is fully depreciated/amortized but then has its original cost changed in accordance with Clause 1, Article 9 of this Circular, its depreciation shall be calculated or it shall be depreciated/amortized for the useful life remaining after its original cost is hanged (if any) in accordance with the law regulations.

4. The original cost sand residual values of fixed assets prescribed in this Circular shall be used as follows:

a) The original costs of fixed assets determined in accordance with Articles 6, 7, and 8 of this Circular, and the residual values of fixed assets determined in accordance with Article 16 of this Circular shall be recorded on accounting books and used to determine the competence to decide on usage and disposal of public assets as prescribed, and to make declarations of information into the national database on public assets.

b) The original costs of fixed assets determined in accordance with Articles 6, 7, and 8 of this Circular and the residual values of fixed assets determined in accordance with Article 16 of this Circular shall not be used as selling prices of the respective fixed assets or as prices for transfer of land use rights or lease of assets, or not be used to determine values in order to contribute capital to cooperative joint ventures, or for the purpose of involving fixed assets in public-private partnership investment projects.

Chapter III

ORIGINAL COSTS, AMORTIZATION, DEPRECIATION, RESIDUAL VALUE OF FIXED ASSETS

Article 6. Determination of original costs of tangible fixed assets

The original costs of the tangible fixed assets prescribed at Point a, Clause 1, Article 4 of this Circular (other than special fixed assets prescribed at Point c, Clause 1, Article 4 of this Circular) shall be determined as follows:

1. The original cost of a fixed asset formed from procurement is determined using the following formula:

Where:

a) Commercial discounts or rebates or seller penalties (if any) are the amounts deductible from the invoice value only if such invoice value is inclusive of such discounts or rebates or seller penalties.

b) Other costs (if any) are the reasonable costs incurred in direct relation to the procurement of the fixed asset by the authority/organization/unit/enterprise until such fixed asset is put into use (including tendering costs that are reimbursed from non-tendering revenue as prescribed by law regulations). In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and invoice values of the fixed assets to which such overhead cost is incurred, etc.)

2. The original cost of a fixed asset formed from investment and construction is the account-finalized value approved by a competent authority or person in accordance with the law regulations on investment and construction. Some special cases are prescribed as follows:

a) If an asset is put into use (after the investment and construction thereof is completed) without any account-finalized value approved by any competent authority or person, it shall be recorded as a fixed asset on the accounting book and subject to asset accounting by the authority/organization/unit/enterprise on the date it is tested, accepted, handed over and put into use. The original cost recorded on the accounting book is a temporarily-calculated original cost. The temporarily-calculated original cost in this case shall be selected following the priority order below:

- Proposed account-finalized value;

- Value determined according to the Acceptance Record A-B;

- Value of total investment or approved project estimate or latest re-valuated project estimate (in the case where the project estimate is re-valuated).

When the account-finalization is approved by the competent authority or person, the authority/organization/unit/enterprise shall re-valuate the temporarily-calculated original cost in commensurate with the approved account-finalized value, then adjust the accounting book and conduct asset accounting accordingly.

b) In the case where a project consists of various items or assets (various accounting objects to be recorded as fixed assets in the accounting book), each of which is not separately estimated and account-finalized, the authority/organization/unit/enterprise shall allocate the account-finalized value approved by the competent authority or person to each item or asset in order that such value shall be recorded in the accounting book according to appropriate criteria (such as: construction area, detailed quantity of each item or asset, etc.).

In the case where a project consists of various items or assets (various accounting objects to be recorded as fixed assets in the accounting book), each of which is separately estimated but not separately account-finalized, the authority/organization/unit/enterprise shall allocate the account-finalized value approved by the competent authority or person to each item or asset in order that such value shall be recorded in the accounting book according to appropriate criteria (such as: construction area, detailed quantity and estimated value of each item or asset, etc.).

c) For a project consists of various items or assets (various accounting objects to be recorded as fixed assets in the accounting book), each of which is separately invested in, tested and accepted, whichever item or asset has its investment and construction completed or is tested, accepted, handed over and put into use shall be recorded on the accounting book from the date it is handed over and put into use.

d) In the case where the account-finalized value of the project must be re-valuated upon request or under conclusion of the competent authority after inspection or audit, the authority/organization/unit/enterprise must adjust the original cost in commensurate with the account-finalized value re-valuated upon request or under conclusion of the competent authority.

3. The cost of a fixed asset, which is handed over or transferred, shall be determined using the following formula: 

Where:

a) Original cost stated in the record on handover and receipt of the asset is determined as follows:

a.1) If the asset has been tracked in the accounting books, the original cost stated in the record on handover and receipt of the asset is the original cost of the fixed asset that has been tracked in the accounting books of the authority/organization/unit/enterprise that owns the handed over or transferred fixed asset.

In the case where a fixed asset has not been tracked on the accounting books, before escalating to the competent authority or person that can make the decision to provide or transfer such asset, the authority/organization/unit/enterprise that owns the transferred asset or is tasked with preparing the plan to dispose of such asset shall re-valuate such asset and the remaining depreciation period of such asset. Where:

- In the case where the asset, which is handed over or transferred, is a fixed asset of an authority/organization/unit/enterprise prescribed in Clause 1, Article 2 of this Circular and has not yet been recorded in the accounting book thereof, the revaluation of such asset shall comply with Points a.2, a.3, and a.4 of this Clause.

- In the case where the asset, which is handed over or transferred, is otherwise prescribed (not a fixed asset of an authority/organization/unit/enterprise prescribed in Clause 1, Article 2 of this Circular), the revaluation of such asset shall comply with relevant law regulations.

a.2) If the asset has not yet been tracked in the accounting book but there is a dossier indicating the purchase or construction cost thereof and the time such asset is put into use, the original cost stated in the record on handover and receipt of the asset shall be determined in accordance with Clauses 1 and 2 of this Clause.

a.3) If the asset has not yet been tracked in the accounting book and there is no dossier indicating the purchase or construction cost thereof, but there are bases for determining the time such asset is put into use and the purchase cost of a new asset of the same type or construction cost of a new asset with equivalent technical specifications at the time such asset is put into use, the original cost stated in the record on handover and receipt of the asset is determined using the following formula:

Where:

- Purchase cost of a new asset of the same type applies to assets that are not houses, constructions, or structures, and is the cost of a new asset of the same type that is sold on the market at the time the asset is put into use.

- Construction cost of a new asset with equivalent technical specifications applies to assets that are houses, constructions, or structures (including houses, constructions, or structures formed through procurement), and is determined using the following formula:

a.4) If the asset has not yet been tracked on the accounting book and there is no basis for determining the original cost as prescribed at Points a.2 and a.3 of this Clause, the authority/organization/unit/enterprise that owns the asset or is tasked with preparing the plan to dispose of such asset shall hire an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining depreciation period of such asset to determine the original cost stated on the record of handover and receipt of the asset, using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1, Article 13 of this Circular.

b) Other costs (if any) are the reasonable costs incurred in direct relation to the receipt of a fixed asset, which is handed over or transferred, by the receiving authority/organization/unit/enterprise until the fixed asset is put into use. In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

4. The original cost of a fixed asset, which is given as a donation/gift or for the purpose of sales promotion, is determined as follows:

Where:

a) Value of a given asset is determined in accordance with the law regulations on disposal of assets under ownership of the public.

b) Value of the asset, which is given for the purpose of sales promotion, is determined by the authority/organization/unit/enterprise receiving such asset at the market price of the similar asset or one with similar technical standards or origin.

c) Other costs (if any) are reasonable costs incurred in direct relation to the receipt of a fixed asset, which is given as a donation/gift or for the purpose of sales promotion, by the receiving authority/organization/unit/enterprise until the fixed asset is put into use. In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

5. The original cost of an extra fixed asset detected after stocktaking shall be determined using the following formula:

Where:

a) Original cost stated in the stocktaking record is determined as follows:

a.1) If there is a dossier indicating the purchase or construction cost of the asset and the time such asset is put into use, the original cost stated in the stocktaking record shall be determined in accordance with Clauses 1 and 2 of this Clause.

a.2) If there is no dossier indicating the purchase or construction cost of the asset, but the time such asset is put into use and the purchase cost of a new asset of the same type or construction cost of a new asset with equivalent technical specifications at the time such asset is put into use can be determined on available grounds, the original cost stated in the stocktaking record is determined using the following formula:

Where:

- Purchase cost of a new asset of the same type applies to assets that are not houses, constructions, or structures, and is the cost of a new asset of the same type that is sold on the market at the time the asset is put into use.

- Construction cost of a new asset with equivalent technical specifications applies to assets that are houses, constructions, or structures (including houses, constructions, or structures formed through procurement), and is determined using the following formula:

a.3) In the case where there is no basis for determining the original cost of the fixed asset as prescribed at Points a.1 and a.2 of this Clause, the authority/organization/unit/enterprise that owns the asset shall hire an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining depreciation period of such asset to determine the original cost stated on the stocktaking record, using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs incurred by the authority/organization/unit/enterprise in the process of stocktaking and determining the original cost and residual value of the fixed asset to be recorded on the accounting book (including the cost of hiring an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining depreciation period of such asset as prescribed at Point a.3 of this Clause). In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

6. In the case where public non-business units undertake cooperative joint ventures resulting in the establishment of new legal entities, the original costs of the fixed assets received by such public non-business units after the cooperative joint ventures expire as prescribed in Article 47, Clause 6 of Decree No. 151/2017/ND-CP shall be determined as follows:

a) In the case where the fixed assets are distributed to public non-business units in kind, the original costs of such fixed assets are those tracked on the accounting books of the legal entities established as a result of the cooperative joint ventures.

In the case where the fixed assets have not yet been tracked on the accounting books of the legal entities established as a result of the cooperative joint ventures, the public non-business units shall hire eligible valuation organizations to re-valuate the residual values of the assets and the remaining depreciation periods of such assets in order to determine the original costs of such fixed assets using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1, Article 13 of this Circular.

b) In the case where the assets cannot be distributed in kind and the public non-business units redeem the portion of assets from the partners, the legal entities established as a result of the cooperative joint ventures shall hire organizations eligible for conducting price appraisal to re-valuate the residual values of such assets at the market prices (as the basis for determining the prices to redeem the portion of assets from the partners) and the remaining depreciation periods of the assets, and, on such basis, determine the original costs of the fixed assets using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1, Article 13 of this Circular.

c) In the case where the partner voluntarily transfers the ownership of its portion of the asset to the State without claiming any reimbursement and such asset is then handed over or transferred to the public non-business unit for management and use, the original cost of the fixed asset shall be determined the same as in the case where the asset is distributed to the public non-business unit in kind as prescribed at Point a of this Clause.

7. In the case where public non-business units undertake cooperative joint ventures without new legal entities established and all parties contribute assets or jointly invest capital in construction or procurement of assets for the purposes of the cooperative joint ventures, the original costs of the fixed assets received by the public non-business units after the cooperative joint ventures expire as prescribed in Clause 6, Article 47 of Decree No. 151/2017/ND-CP shall be determined as follows:

a) In the case where the public non-business units contribute assets

a.1) For assets contributed by the public non-business units to the cooperative joint ventures, such public non-business units continue to use the original costs tracked in their accounting books to conduct accounting of fixed assets throughout the cooperative joint ventures and after the cooperative joint ventures expire.

a.2) For fixed assets formed during the cooperative joint ventures, the public non-business units may not conduct accounting thereof. Upon expiration of the cooperative joint ventures, if the assets belong to the public non-business units, the original costs of such assets shall be determined in accordance with Point b of this Clause.

b) In the case where the public non-business units, together with other parties, jointly invest capital in construction or procurement of assets for the purposes of the cooperative joint ventures, such public non-business units may no conduct accounting of the fixed assets formed throughout the cooperative joint ventures, but must track such assets. Upon expiration of the cooperative joint ventures, if the assets belong to the public non-business units, they shall determine the original costs thereof as follows:

b.1) In the case where the assets are distributed to the public non-business units in kind, the original costs of such fixed assets shall be determined using the following formula:

Other costs (if any) as mentioned above are the reasonable costs incurred in direct relation to the procurement of a fixed asset by the authority/organization/unit/enterprise until the fixed asset is put into use. In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the public non-business unit according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

b) In the case where the asset cannot be distributed in kind and the public non-business unit must redeem the portion of the asset from its partner under the cooperative joint venture contract (with payment made to the partner at the market price), the public non-business unit and its partner shall hire an organization eligible for conducting price appraisal to re-valuate the residual value of the asset at the market price (as the basis for determining the price to redeem the partner's portion of the asset) and the remaining depreciation period of the asset, and, on that basis, determine the original cost of the fixed asset using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1, Article 13 of this Circular.

b.3) In the case where the asset cannot be distributed in kind and the partner voluntarily transfers the ownership of its portion of the asset to the State without claiming any reimbursement and such asset is then handed over or transferred to the public non-business unit for management and use, the original cost of the fixed asset shall be determined the same as in the case where the asset is distributed to the public non-business unit in kind as prescribed at Point b.1 of this Clause.

Article 7. Determination of original costs of intangible fixed assets

The original costs of the intangible fixed assets prescribed at Point b, Clause 1, Article 4 of this Circular (other than special fixed assets prescribed at Point c, Clause 1, Article 4 of this Circular) shall be determined as follows:

1. The original cost of an intangible fixed asset, which is land use rights, shall be determined as follows:

a) In cases where the value of the land use rights must be determined to be included in the asset value as prescribed in Clause 1, Article 100 of Decree No. 151/2017/ND-CP, the original cost of the intangible fixed asset, which is land use rights, is the value of such land use rights determined in accordance with Clauses 1, 2 and 3, Article 102 of Decree No. 151/2017/ND-CP plus (+) taxes (excluding deductible and refundable taxes) and fees and charges as prescribed by the law regulations on fees and charges.

b) For land leased by the State with one-off rental payment, which is not funded by the State Budget, for the entire lease period in accordance with the law regulations on land, and land whose land use rights are acquired by the authorities, organizations and units with the acquisition cost not funded by the Stated Budget, the original cost of the intangible fixed asset, which is land use rights, is the one-off rental payment for the entire lease period or the land use right acquisition cost plus (+) costs of compensation and site clearance in the case where the State leases land with one-off rental payment for the entire lease period (if any and if the costs of compensation and site clearance have yet been included in neither the project investment capital nor the production and business costs or such costs have not yet been allowed by the competent authorities or persons to be deducted/withheld from the due rental payment).

2. The original cost of an intangible fixed asset formed from investment or procurement is equal to all costs incurred by the authority/organization/unit/enterprise in acquiring such intangible fixed asset. Particularly, land use rights acquired through transfer shall comply with Clause 1 of this Article. For intangible fixed assets formed through an investment project, in the case where the account-finalization is not approved by the competent authority or person and in the case where the account-finalized value of the project must be re-valuated upon requests or under conclusions of the competent authority after inspection or audit, the determination and adjustment of the original costs of such intangible fixed assets shall comply with Clause 2, Article 6 of this Circular.

3. The original cost of an intangible fixed asset, which is handed over or transferred, shall be determined using the following formula:

Where:

a) Original cost stated in the record on handover and receipt of the asset is determined as follows:

a.1) If the asset has been tracked in the accounting books, the original cost stated in the record on handover and receipt of the asset is the original cost of the fixed asset that has been tracked in the accounting books of the authority/organization/unit/enterprise that owns the handed over or transferred fixed asset.

In the case where a fixed asset has not been tracked on the accounting books, before escalating to the competent authority or person that can make the decision to provide or transfer such asset, the authority/organization/unit/enterprise that owns the handed over or transferred asset shall re-valuate such asset and the remaining depreciation period of such asset. Where:

- In the case where the asset, which is handed over or transferred, is land use rights, the original cost stated in the record on handover and receipt of the asset is determined in accordance with Clause 1 of this Article.

- In the case where the asset, which is handed over or transferred, is an intangible fixed asset (excluding land use rights) of an authority/organization/unit/enterprise prescribed in Clause 1, Article 2 of this Circular, and has not yet been tracked in the accounting book, the revaluation of such asset shall comply with Points a.2 and a.3 of this Clause.

- In the case where the asset, which is handed over or transferred, is otherwise prescribed (neither land use rights nor any intangible fixed asset of an authority/organization/unit/enterprise prescribed in Clause 1, Article 2 of this Circular), the revaluation of such asset shall comply with relevant law regulations.

a.2) If the asset has not yet been tracked in the accounting book but there is a basis (a dossier or any proof whatsoever) for determining the costs incurred in forming such intangible fixed asset, the original cost stated in the record on handover and receipt of the asset shall be equal to all costs incurred in forming such intangible fixed asset.

a.3) If the asset has not yet been tracked in the accounting book and there is no basis (a dossier or any proof whatsoever) for determining the costs incurred in forming such intangible fixed asset, the authority/organization/unit/enterprise that owns the asset or is tasked with preparing the plan to dispose of such asset shall hire an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining amortization period of such asset to determine the original cost stated on the record of handover and receipt of the asset, using the following formula:

The depreciation period of the asset as mentioned above is determined in accordance with the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed in Clause 2, Article 13 of this Circular.

b) Other costs (if any) are the reasonable costs incurred in direct relation to the receipt of a fixed asset, which is handed over or transferred, by the receiving authority/organization/unit/enterprise until the fixed asset is put into use. In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

4. The original cost of an intangible fixed asset, which is given as a donation/gift or for the purpose of sales promotion, is determined as follows:

Where:

a) Value of a given asset is determined in accordance with the law regulations on disposal of assets under ownership of the public.

b) Value of the asset, which is given for the purpose of sales promotion, is determined by the authority/organization/unit/enterprise receiving such asset at the market price of the asset at the time it given for the purpose of sales promotion.

c) Other costs (if any) are reasonable costs incurred in direct relation to the receipt of a fixed asset, which is given as a donation/gift or for the purpose of sales promotion, by the receiving authority/organization/unit/enterprise until the fixed asset is put into use. In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

5. The original cost of an extra fixed asset detected after stocktaking shall be determined using the following formula:

Where:

a) Original cost stated in the stocktaking record is determined as follows:

a.1) If the intangible fixed asset is land use rights, the original cost stated in the stocktaking record is determined in accordance with Clause 1 of this Article.

a.2) If the intangible fixed asset is other than land use rights

- In the case where there is a basis (a dossier or any proof whatsoever) for determining the costs incurred in forming the intangible fixed asset, the original cost stated in the stocktaking record shall be equal to all costs incurred in forming such intangible fixed asset.

- In the case where there is no basis (a dossier or any proof whatsoever) for determining the costs incurred in forming such intangible fixed asset, the authority/organization/unit/enterprise that owns the asset shall hire an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining depreciation period of such asset to determine the original cost stated on the stocktaking record, using the following formula:

The depreciation period of the asset as mentioned above is determined in accordance with the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed in Clause 2, Article 13 of this Circular.

b) Other costs (if any) are reasonable costs incurred by the authority/organization/unit/enterprise in the process of stocktaking and determining the original cost and residual value of the fixed asset to be recorded on the accounting book (including the cost of hiring an organization eligible for conducting price appraisal to re-valuate the residual value of the asset and the remaining depreciation period of such asset as prescribed at Point a.2 of this Clause). In the case where an overhead cost is incurred in relation to various fixed assets, it must be allocated to each of such fixed assets by the authority/organization/unit/enterprise according to appropriate criteria (such as: quantity and values of the fixed assets to which such overhead cost is incurred, etc.)

Article 8. Determination of original costs of special fixed assets

The original costs of the special fixed assets prescribed at Point c, Clause 1, Article 4 of this Circular shall be determined at the conventional price. The conventional price of one special fixed asset is VND 10,000,000 (ten million Vietnamese dong).

Article 9. Change of original costs of fixed assets

1. The original cost of a fixed asset may be changed in the following cases:

a) The fixed asset is re-valuated during the stocktaking process under the Prime Minister's decision.

b) The fixed asset is upgraded or expanded within the project approved by a competent authority or person.

c) Certain part(s) is removed from the fixed asset (in the case where the value of such part is included in the original cost of the fixed asset from which it is removed, as recorded on the accounting book).

d) Certain part(s) is added to the fixed asset.

dd) The fixed asset is partially lost or seriously damaged due to natural disasters, force majeure events, or other unforeseeable impacts (unless it is already restored with public asset insurance).

e) The value of land use rights is re-valuated in the cases prescribed at Point a, Clause 1, Article 7 of this Circular in accordance with Points a, b, and c, Clause 1, Article 103 of the Decree No. 151/2017/ND-CP.

2. When the original cost of a fixed asset is changed in accordance with Points a, b, c, d, and dd, Clause 1 of this Article, the authority/organization/unit/enterprise shall prepare a record on the change in the original cost of such fixed asset, which clearly states the reasons for (cases of) changing the original cost, and the original cost before and after the change. When the original cost of a fixed asset is changed in accordance with Point e, Clause 1 of this Article, the authority/organization/unit/enterprise shall prepare a document as prescribed in Clause 2, Article 103 of Decree No. 151/2017/ND-CP. At the same time, the authority/organizations/unit/enterprise must re-evaluate the original cost of the fixed asset as a basis for calculating the deprecation, the depreciation/amortization expenses, and the residual value of the fixed asset in order to adjust the accounting books and conduct asset accounting in accordance with this Circular.

Article 10. Determination of original costs of fixed assets in the case where the original costs of the fixed assets are changed

1. In the case where the fixed asset is re-valuated during the stocktaking process under the Prime Minister's decision as prescribed at Point a, Clause 1, Article 9 of this Circular, the original cost of the fixed asset shall be re-valuated in accordance with the guidelines of the competent authority in charge of stocktaking and asset revaluation.

2. In the case where the fixed asset is upgraded or expanded within the project approved by a competent authority or person as prescribed at Point b, Clause 1, Article 9 of this Circular, the re-valuated original cost of the fixed asset shall equal (=) the current original cost recorded in the accounting book, plus (+) the increased value resulting from the upgrade or expansion of such fixed asset. The increased value resulting from the upgrade or expansion of such fixed asset as mentioned above is the account-finalized value approved by the competent authority or person in accordance with the law regulations on investment and construction, and relevant law regulations.

3. In the case where certain part(s) is removed from the fixed asset as prescribed at Point c, Clause 1, Article 9 of this Circular, the re-valuated original cost of the fixed asset shall equal (=) the current original cost recorded in the accounting book, minus (-) the value of the part removed from the fixed asset plus (+) reasonable costs incurred in direct relation to such removal by the authority/organization/unit/enterprise until the removal is completed.

The value of the part removed from the fixed asset as mentioned above is determined as follows:

a) In the case where there is a dossier indicating the purchase price and the account-finalized value/estimated value of the part removed from the fixed asset, the value of the part removed from the fixed asset is determined at the purchase price and the account-finalized value/estimated value of such part.

b) In the case where there is no such dossier as prescribed at Point a of this Clause but the original cost of the fixed asset is allocated to the part removed from the fixed asset according to appropriate criteria (such as: the area, quantity, purchase price, estimate, etc.), the value of the part removed from the fixed asset is determined in commensurate with such allocated value.

c) In the case where there is no such dossier as prescribed at Point a of this Clause and it is impossible to allocate the original cost of the fixed asset to the part removed from the fixed asset as prescribed at Point b of this Clause, the value of the part removed from the fixed asset is determined as the purchase price of a new part similar to that removed from the fixed asset in the market at the time the asset was put into use.

In the case where the purchase price of a new part similar to that removed from the fixed asset on the market at the time the asset is put into use cannot be determined, the authority/organization/unit/enterprise shall hire an organization eligible for conducting price appraisal to determine the value of the part removed from the fixed asset as a basis for determining the original cost of the fixed asset after such part is removed.

4. In the case where certain part(s) is added to the fixed asset as prescribed at Point d, Clause 1, Article 9 of this Circular, the re-valuated original cost of the fixed asset shall equal (=) the current original cost recorded in the accounting book, plus (+) the increased value due to the additional installation of such part to the fixed asset plus (+) reasonable costs incurred in direct relation to such installation by the authority/organization/unit/enterprise until the installation is completed.

The increased value due to the additional installation of such part to the fixed asset as mentioned above is the value of the respective part added to the fixed asset, which is determined in accordance with Article 6 of this Circular.

5. In the case where a fixed asset is partially lost or severely damaged due to natural disasters, force majeure events, or other unforeseeable impacts as prescribed at Point dd, Clause 1, Article 9 of this Circular, the authority/organization/unit/enterprise owning such asset shall hire an organization eligible for conducting price appraisal to re-valuate the value and the remaining depreciation period of such asset to be stated in the record of change of the original cost of the fixed asset. The original cost of the fixed asset in this case shall equal the value of the fixed asset after revaluation.

6. In the case where the value of land use rights is re-valuated as prescribed at Point e, Clause 1, Article 9 of this Circular, the re-valuated original cost of the fixed asset shall equal the re-valuated value of the land use rights determined in accordance with Clauses 1, 2, and 3, Article 102 of Decree No. 151/2017/ND-CP according to the criteria (land price, land area, land use purpose) (if any) plus (+) taxes (excluding deductible or refundable taxes) and fees and charges as prescribed by the law regulations on fees and charges.

Article 11. Depreciable/amortizable fixed assets

1. The existing fixed assets of authorities, organizations and units and the fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises shall be all depreciable, unless otherwise prescribed in Clauses 2, 3, and 4 of this Article.

2. Depreciable/amortizable fixed assets of public non-business units include:

a) The fixed assets of public non-business units that self-fund their own recurrent expenditures and capital expenditures.

b) The fixed assets of public non-business units that must fully include depreciation expenses of their fixed assets in the service prices in accordance with the law regulations.

c) The fixed assets of public non-business units, which are not prescribed at Points a and b of this Clause and used in business operations, leased, or used for joint venture and association without new legal entity established in accordance with law regulations.

3. The following assets are not depreciable/amortizable:

a) The fixed assets which are land use rights in the cases where the value of land use rights must be determined to be included in the asset value as prescribed in Article 100 of Decree No. 151/2017/ND-CP.

b) The special fixed assets prescribed at Point c, Clause 1, Article 4 of this Circular.

c) The fixed assets which have not yet had their depreciation fully expensed or have not yet been fully depreciated/amortized but remain usable (including fixed assets received by public non-business units after the cooperative joint ventures expire).

d) The fixed assets, which have not yet had their depreciation fully expensed or have not yet been fully depreciated/amortized, damaged to the extent they are no longer usable.

4. For the fixed assets that are brands of public non-business units used in cooperative joint ventures, the brand value of the public non-business units in order to contribute capital to cooperative joint ventures shall be allocated to the cooperative joint venture expenses annually in accordance with Clause 3, Article 15 of this Circular.

Article 12. Principles for calculating depreciation and amortization of fixed assets

1. Principles for calculating depreciation of fixed assets

a) The depreciation of fixed assets shall be calculated once every year in December before the accounting book is closed.

b) The depreciation of the fixed assets prescribed at Point c, Clause 2, Article 11 of this Circular shall be calculated and such assets shall also be depreciated/amortized in accordance with Article 15 of this Circular.

c) The depreciation of a fixed asset received by an authority/organization/unit/enterprise from another authority/organization/unit/enterprise under the decision of a competent authority or person within a year, the depreciation of such year shall be calculated by the authority/organization/unit/enterprise receiving such asset.

2. Principles for depreciating/amortizing fixed assets

a) The principles for depreciating/amortizing the fixed assets prescribed at Point a and Point b, Clause 2 and Article 11 of this Circular shall comply with the regulations applicable to enterprises.

b) The fixed assets prescribed at Point c, Clause 2, Article 11 of this Circular shall be depreciated/amortized from the date on which such assets are used for business purposes, leased, or used in joint venture and association and such depreciation/amortization shall stop after the date on which such assets are no longer used for business purposes, leased, or used in joint venture and association.

c) The depreciation expense shall be allocated to each non-business operation, business operation, lease, joint venture and association in order to making an accounting record of each respective operation.

Article 13. Depreciation periods and depreciation rates of fixed assets

1. The depreciation periods and depreciation rates of tangible fixed assets shall be based on Appendix No. 01 to this Circular, unless:

a) The tangible fixed assets are used in the localities where the weather and environmental conditions can affect their depreciation rates and it is necessary to prescribe their depreciation periods and depreciation rates differently from those prescribed in Appendix No. 01 to this Circular. In this case, the Ministers, Heads of central authorities, and provincial-level People’s Committees shall adopt specific regulations. The increase or decrease of depreciation rates of such fixed assets shall not exceed 20% of the respective depreciation rates prescribed in Appendix No. 01 to this Circular.

b) If the original cost of a fixed asset is changed because such fixed asset is upgraded or expanded within the project approved by a competent authority or person as prescribed at Point b, Clause 1, Article 9 of this Circular, the depreciation period of the fixed asset shall equal (=) the period of time the asset has been used before the original cost is changed, plus (+) the remaining depreciation period of the asset after the upgrade or expansion. The remaining depreciation period of the asset after upgrade or expansion as mentioned above shall be determined using the following formula:

c) If the original cost of a fixed asset is changed because such fixed asset is partially lost or severely damaged due to natural disasters, force majeure events, or other unforeseeable impacts as prescribed at Point dd, Clause 1, Article 9 of this Circular, the depreciation period of the fixed asset shall equal (=) the period of time the asset has been used before the original cost is changed, plus (+) the remaining depreciation period of the asset after revaluation.

d) If the original cost of a fixed asset is re-valuated or changed in accordance with Point a and Point d, Clause 2, Article 6, and Point c and Point d, Clause 1, Article 9 of this Circular:

d.1) In the case where, in the year the original cost has is re-valuated or changed, the depreciation period of the fixed asset as prescribed has not yet expired, the depreciation period of the asset shall last until the year the residual value of such asset as of December 31 of the preceding year is less than or equal to the annual depreciation of the asset.

d.2) In the case where, in the year the original cost has is re-valuated or changed, the depreciation period of the fixed asset as prescribed has expired, 01 year shall be added to the depreciation period (the year the original cost is re-valuated or changed) to handle the increased or decreased value due to such revaluation or change of the original cost.

2. The Ministers, Heads of central authorities, and provincial-level People’s Committees shall specify the lists of intangible fixed assets (other brands of public non-business units) and their respective depreciation periods and rates under the management of the respective Ministries, central authorities, or local authorities (using Form No. 01 handed over in Appendix No. 02 to this Circular).

The depreciation period of an intangible fixed asset shall not be lower than 04 (four) years and not exceed 50 (fifty) years.

In the case where it is necessary to set the depreciation period of less than 04 years for an intangible fixed asset, the Minister or the Head of the central authority or the provincial-level People's Committee shall provide specific regulations after reaching consensus with the related line-managing ministry.

Article 14. Methods for calculating the depreciation of fixed assets

1. The annual depreciation of each fixed asset (unless otherwise prescribed in Clauses 2, 3, 4, 5, 6, and 7 of this Article) shall be determined using the following formula:

The depreciation rate of the asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

2. The depreciation of the fixed asset, which is transferred or transferred as prescribed in Clause 3, Article 6 and Clause 3, Article 7 of this Circular, shall be determined as follows:

a) The authority/organization/unit/enterprise that owns the transferred or received asset or is tasked with preparing the plan to dispose of such asset shall calculate the depreciation of the asset until the year the competent authority or person decides to provide or transfer the asset to serve as a basis to determine the residual value of the transferred or received asset as follows:

a.1) In the cases prescribed at Point a.1, Clause 3, Article 6 and Point a.1, Clause 3, Article 7 of this Circular, the annual depreciation of the asset shall be determined using the formula prescribed in Clause 1 of this Article and the accumulated depreciation shall be determined using the formula prescribed in Clause 8 of this Article;

a.2) In the cases prescribed at Point a.2 and Point a.3, Clause 3, Article 6, and Point a.2, Clause 3, Article 7 of this Circular, the depreciation and the accumulated depreciation of the asset as of the year the provision or transfer of the asset is escalated to the competent authority or person for decision thereon shall be determined using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

a.3) In the cases prescribed at Point a.4, Clause 3, Article 6, and Point a.3, Clause 3, Article 7 of this Circular, the depreciation and the accumulated depreciation of the asset as of the year the provision or transfer of the asset is escalated to the competent authority or person for decision thereon shall be determined using the following formula:

a.4) In the case where the year the asset is handed over or transferred differs from the year such provision or transfer is escalated to the competent authority or person for decision thereon, the authority/organization/unit/enterprise that owns the transferred asset or is tasked with preparing the plan to dispose of such asset shall calculate the additional depreciation for the period of time from the year such provision or transfer is escalated to the competent authority or person for decision thereon to the year the asset is actually handed over or transferred, to be stated in the record of handover and receipt of the asset. Depreciation of the fixed asset in 01 year is determined using the formula prescribed in Clause 1 of this Article.

b) The authority/organization/unit/enterprise receiving the transferred or received asset shall calculate the depreciation of such asset from the year it receives and puts such asset into use. Annual depreciation of the asset is determined using the formula prescribed in Clause 1 of this Article.

3. The annual depreciation of the extra fixed assets detected after stocktaking prescribed in Clause 5, Article 6 and Clause 5, Article 7 of this Circular since the first year they were recorded on the accounting books of the authorities, organizations, units and enterprises shall be determined using the formula prescribed in Clause 1 of this Article.

Particularly, the depreciation in the first year they were recorded on the accounting books of the authorities, organizations, units and enterprises (the year on which the extra fixed assets are detected after stocktaking) shall be determined using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

4. The annual depreciation of the fixed assets received by the public non-business units after the cooperative joint ventures expire, the fixed assets contributed by the public non-business units to the cooperative joint ventures, and the fixed assets formed during the cooperative joint ventures without new legal entities established as prescribed in Clauses 6 and 7, Article 6 of this Circular since the first year they were recorded on the accounting books of the units (after the year the cooperative joint ventures expire) shall be determined using the formula prescribed in Clause 1 of this Article.

Particularly, the depreciation in the first year they were recorded on the accounting books of the units shall be determined using the following formula:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

5. If the original cost of a fixed asset is changed because such fixed asset is upgraded or expanded within the project approved by a competent authority or person as prescribed at Point b, Clause 1, Article 9 of this Circular, the annual depreciation of the asset from the year the original cost is changed shall be determined using the following formula:

The depreciation rate of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

6. If the original cost of a fixed asset is re-valuated or changed in accordance with Point a and Point d, Clause 2, Article 6, and Point c and Point d, Clause 1, Article 9 of this Circular:

a) The annual depreciation of the fixed asset from the year the original cost is re-valuated or changed shall be determined using the following formula:

The depreciation rate of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

In the last year of the depreciation period of the fixed asset as prescribed, the depreciation of the asset equals the residual value of the fixed asset as of December 31 of the year preceding the last year of the depreciation period.

b) In the case where, at the time the original cost is re-valuated or changed, the depreciation period of such fixed asset as prescribed has expired, the depreciation in the year the original cost is re-valuated or changed shall be determined using the following formula:

In the following years, the depreciation shall not be calculated or the fixed asset shall not be depreciated.

7. If the original cost of a fixed asset is changed because such fixed asset is partially lost or severely damaged due to natural disasters, force majeure events, or other unforeseeable impacts as prescribed at Point dd, Clause 1, Article 9 of this Circular, the annual depreciation of such asset from the year the original cost is change shall be determined using the following formula:

8. Accumulated depreciation each or allocated depreciation expenses of such fixed asset shall be determined using the following formula:

9. The depreciation rate in the last year of the depreciation period of the fixed asset is the difference between its original cost and the accumulated depreciation or allocated depreciation expenses of such fixed asset, which are determined in accordance with Clause 8 of this Circular.

Article 15. Regulations on depreciation/amortization of fixed assets of public non-business units

1. The unit shall apply the regime, as applicable to enterprises as prescribed, of managing and depreciating/amortizing the fixed assets prescribed at Points a and b, Clause 2, Article 11 of this Circular and those prescribed at Point c, Clause 2, Article 11 of this Circular, which shall be, for their lives entirely, used for business operations, leased, or used in joint venture and association. In case of necessity, the depreciation rates of the fixed assets shall be prescribed differently from those applicable to enterprises as follows:

a) If the fact that the fixed assets prescribed at Point a, Clause 2, Article 11 of this Circular are depreciated/amortized at the rates applicable to enterprises affects the operations of the public non-business units, they shall send reports to their managing superiors (if any) in order for the latter to escalate such reports to the Ministers, Heads of central authorities, and provincial-level People’s Committee for consideration thereof and decision on adjustment of the depreciation rates of fixed assets accordingly, thereby ensuring the service quality and prices for public services handed over by such public non-business units.   

b) If the fact that the fixed assets prescribed at Point b, Clause 2, Article 11 of this Circular are depreciated/amortized at the rates applicable to enterprises affects the operations of the public non-business units, they shall send reports to their managing superiors (if any) in order for the latter to escalate such reports to the Ministers, Heads of central authorities, and provincial-level People’s Committee for consideration thereof and decision on adjustment of the depreciation rates of fixed assets in line with the road map for applying the public service prices promulgated by the competent authorities or persons in accordance with the regulations.

c) In the case where it is necessary to depreciate/amortize the fixed assets prescribed at Point c, Clause 2, Article 11 of this Circular, which shall be, for their lives entirely, used for business operations, leased, or used in joint venture and association, at the respective depreciation rates prescribed in this Circular, the units using such assets must put forward the schemes for using such assets for business operations, leasing them, or using them in cooperative joint ventures to their managing superiors (if any) in order for the latter to escalate such schemes to the competent authorities or persons for consideration thereof and decision on the adjustment of depreciation rates of such fixed assets accordingly.

2. If the fixed assets prescribed at Point c, Clause 2, Article 11 of this Circular are used for business operations, leased, and used in cooperative joint ventures as well as used in operations in accordance with the functions and tasks of the public non-business unit: 

a) The unit shall calculate and determine the total depreciation and total depreciation expenses of such fixed assets as prescribed in Article 14 of this Circular.

b) Based on the period of use, frequency of use, or volume of work completed, the unit shall calculate depreciation and allocate depreciation expenses within the total depreciation and depreciation expenses in the year determined in accordance with Point a of this Article in order to include such depreciation expenses in the expenses for provision of public services, business operations, leasing, cooperative joint ventures, and conduct accounting of the depreciation of the fixed assets.

3. If the fixed assets are the brand of the public non-business unit and are used in cooperative joint ventures:

a) The brand value of the public non-business unit in order to contribute capital to a cooperative joint venture shall be determined in accordance with Vietnam Valuation Standards, the law regulations on intellectual property and other relevant law regulations, in order to be used as the basis for the competent authority or person to approve the brand value of the unit contributing capital to a cooperative joint venture.

b) The brand value of the public non-business unit in order to contribute capital to the cooperative joint venture shall be annually/monthly allocated to the cooperative joint venture expenses and determined as follows:

4. The management and use of the depreciation expenses and brand value of the public non-business unit allocated to the cooperative joint venture:

The depreciation expenses for fixed assets prescribed in Clause 1 and Clause 2 of this Article and the brand value of the public non-business unit allocated to the cooperative joint venture expenses prescribed in Clause 3 of this Article shall be used to supplement the fund for developing non-business operations of the unit. Particularly, the depreciation expenses of the fixed assets, which are invested in and procured with loan capital or mobilized capital, shall be used to repay both principal and interest. The residual amount (if any) shall be used to supplement the fund for developing non-business operations of the unit.

Article 16. Residual value of fixed assets

1. The residual value of the fixed asset to be recorded on the accounting book shall be determined using the following formula:

2. The residual value of any fixed asset re-valuated in accordance with Point a.4, Clause 3, Point a.3, Clause 5, Points a and b, Clause 6, Point b.1, Clause 7, Article 6, Point a.3, Clause 3, Point a.2, Clause 5, Article 7, and Clause 5, Article 10 of this Circular after revaluation is the residual value of such fixed asset after such revaluation.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 17. Transitional provisions

1. The annual depreciation of the fixed assets that have been tracked in the accounting books of authorities, organizations, units, and enterprises before the effective date of this Circular but their depreciation periods and depreciation rates as prescribed in Appendix No. 01 to this Circular or regulations of the Ministers, Heads of central authorities, and provincial-level People’s Committees are different from those prescribed in Appendix No. 01 to the Minister of Finance’s Circular No. 45/2018/TT-BTC dated May 7, 2018 or regulations before the effective date of this Circular of the Ministers, Heads of central authorities, and provincial-level People’s Committees, shall be determined as follows from the fiscal year of 2023:

Where:

The depreciation period of the same-type asset as mentioned above is determined in accordance with the regulations prescribed in Appendix No. 01 attached to this Circular and the regulations of the Minister/Head of the central authority/provincial-level People's Committee as prescribed at Point a, Clause 1 and Clause 2 Article 13 of this Circular.

Particularly, the depreciation rate in the last year of the depreciation period of the fixed asset is the difference between its original cost and the accumulated depreciation or allocated depreciation expenses of such fixed asset.

In the case where the depreciation period of the fixed asset as prescribed ends but it has residual value, the depreciation of 2023 equals the residual value of the fixed asset as of December 31, 2022.

2. The annual depreciation of the fixed assets whose original costs are changed before the effective date of this Circular, with re-valuated fixed asset original cost and residual value items to adjust accounting books and conduct accounting thereof in accordance with Clause 2, Article 10 of the Minister of Finance’s Circular No. 45/2018/TT-BTC dated May 7, 2018 shall be determined based on the re-valuated original costs which have been subject to accounting and the depreciation rates of fixed assets prescribed in this Circular from the fiscal year of 2023.

3. If the fixed assets for which the decisions on provision or transfer thereof are made prior to the effective date (July 2, 2018) of the Minister of Finance’s Circular No. 45/2018/TT-BTC dated May 7, 2018, have not yet been tracked on the accounting books before such provision or transfer or have not yet been re-valuated upon such provision or transfer, the receiving authorities, organizations, units or enterprises shall re-valuate such assets in accordance with Clause 3, Article 6 of this Circular in order to record them into the accounting books, and determine the annual depreciation of such assets in accordance with Clause 2, Article 14 of this Circular in order to conduct accounting of such assets from the fiscal year of 2023.

4. In the case where, the authorities, organizations, units, or enterprises have not re-valuated the value of land use rights in accordance with Article 103 of the Law on Management and Use of Public Assets from 2018 to 2022, they shall re-valuate the value of land use rights for accounting purposes from the fiscal year of 2023.

Article 18. Effect

1. This Circular takes effect on June 10, 2023 and shall be apply from the financial year of 2023.

2. This Circular supersedes Circular No. 45/2018/TT-BTC dated May 7, 2018 of the Minister of Finance on guiding the regime for managing, calculating depreciation and amortization of fixed assets of authorities, organizations or units, and fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises.

3. In the case where legal documents incorporated by reference in this Circular are amended, supplemented, or replaced by other legal documents, the amendments, supplements, or replacements shall prevail.

4. Ministers, heads of ministerial-level authorities, Government-attached agencies, other central authorities, People's Committees of provinces and municipalities shall be responsible for directing and organizing the management, calculation of depreciation, and depreciation/amortization of fixed assets of authorities, organizations, units, and fixed assets handed to enterprises by the State but not deemed capital portions held by the State in such enterprises in accordance with this Circular./.

* All Appendices are not translated herein.