Hello, Lawnet would like to answer as follows:
1. What is fixed asset? What is depreciation of fixed assets?
What is fixed asset?
Assets are not generally specified, however, in Article 2 of Circular 45/2013/TT-BTC, the definition for each type of fixed asset is as follows:
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– Tangible fixed assets: are means of labor primarily in the physical forms and satisfy the criteria of tangible fixed assets, involved in many business cycle but remain original physical forms as buildings, structures, machinery, equipment, means of transportation …
– Intangible fixed assets: these assets are not physical forms, represents a value of the investment has to satisfy the criteria of an intangible asset, involved in many business cycles such as some costs directly related to land use; issuance right, patent, copyright …
– Fixed assets of financial leasing are the assets which enterprises lease from financial leasing companies. At the end of the lease term, the lessee has the right to purchase the leased property or continues the lease under the terms agreed in the lease contract. The total rent of an asset type specified in the financial leasing contract must be at least equal to the value of that asset at the time of contract signing.
All leased assets if not meeting the above-mentioned regulations are considered as the operating leased fixed assets
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– Similar fixed assets: are the ones with their similar utility in the same business area with equivalent value.
What is depreciation of fixed assets?
Depreciation of fixed assets the calculation and allocation of primary price of fixed assets, when the value of such assets is gradually reduced by natural wear and tear or technological progress over time.
Depreciation of fixed assets is included in the cost of production and business during the period when such assets are used by the enterprise.
2. Types of fixed assets that do not need to be depreciated in Vietnam
According to the provisions of Clause 1, Article 9 of Circular 45/2013/TT-BTC (amended by Clause 4, Article 1 of Circular 147/2016/TT-BTC), all of the enterprise’s current fixed assets must be depreciated excluding the following fixed assets:
– Fixed assets have been fully depreciated but are still used in production and business activities.
– Fixed assets are lost during depreciation.
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– 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 (excluding the fixed assets to serve employees working at enterprises such as mid-shift rest house, shift, mid-shift canteen, dressing house, toilet, clean water tank, garage, medical room or station for health examination, the employee shuttle bus, training facilities, vocational training and housing for employees built by enterprise).
– Fixed assets from the non-refundable aid after the competent agencies have handed them over to enerprises 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.
– Type 6 fixed assets are not subject to depreciation. Only annual monitoring book for each property shall be formulated and the investment in such assets shall not be recorded as a decrease.
Thus, all existing fixed assets of the enterprise must be depreciated, however, the enterprise does not need to depreciate for the above 08 types of fixed assets.
Source: https://t-tees.com
Category: WHICH
