Circular No. 13/2019/TT-BQP stipulates and guides the management regime, depreciation calculation, amortization of fixed assets, and reporting regime for specialized assets, management service assets at units under the Ministry of National Defense, and fixed assets assigned by the State to enterprises for management without being considered part of the State capital in enterprises under the Ministry of National Defense.

CIRCULAR

REGULATIONS AND GUIDELINES ON THE MANAGEMENT, DEPRECIATION, AND AMORTIZATION OF FIXED ASSETS THAT ARE SPECIALIZED ASSETS AND ASSETS USED FOR MANAGEMENT WORK AT UNITS UNDER THE MINISTRY OF NATIONAL DEFENSE AND FIXED ASSETS HELD BY ENTERPRISES FOR MANAGEMENT WITHOUT BEING CONSIDERED STATE CAPITAL COMPONENTS IN ENTERPRISES UNDER THE MINISTRY OF NATIONAL DEFENSE

Based on the Law on Enactment of Legislative Acts dated June 22, 2015;

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

Based on Decree No. 164/2017/NĐ-CP dated December 30, 2017, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of National Defense;

Pursuant to Decree No. 165/2016/NĐ-CP dated December 24, 2016 of the Government on management and use of state budget for certain activities in the defense and security sectors;

Pursuant to Decree No. 151/2017/NĐ-CP dated December 26, 2017 of the Government detailing certain provisions of the Law on Management and Use of Public Assets;

At the proposal of the Director of the Financial Department;

The Minister of National Defense issues this Circular to regulate and guide the management regime, depreciation, amortization of fixed assets; and the reporting regime for specialized assets and assets used for management work at units under the Ministry of National Defense and fixed assets held by enterprises for management without being considered state capital components in enterprises under the Ministry of National Defense.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

1. This Circular regulates and guides the management regime, depreciation, and amortization of fixed assets; the reporting regime for specialized assets and assets used for management work at agencies, budgetary units, public service organizations (hereinafter referred to collectively as units) and fixed assets held by enterprises for management without being considered state capital components in enterprises under the Ministry of National Defense (hereinafter referred to as enterprises).

2. Specialized assets and assets used for management work at units shall be implemented according to the provisions of Circular No. 318/2017/TT-BQP dated December 31, 2017, issued by the Minister of National Defense, which stipulates the list of specialized assets and assets used for management work and the system of books and forms for tracking special assets, specialized assets, and assets used for management work within the Ministry of National Defense.

Article 2. Applicability

1. Units that have financial departments shall organize the implementation of the management regime, depreciation, and reporting regime for fixed assets; in cases where units do not have financial departments, the higher-level financial department shall organize the implementation of these regimes.

2. State-owned enterprises entrusted with managing fixed assets without being considered state capital components in enterprises as stipulated in Clause 2, Clause 3, Clause 4, and Clause 5 of Article 88 of Decree No. 151/2017/NĐ-CP dated December 26, 2017, issued by the Government, detailing certain provisions of the Law on Management and Use of Public Assets.

Chapter II

REGULATIONS AND GUIDELINES ON THE MANAGEMENT AND DEPRECIATION OF FIXED ASSETS

Section 1. REGULATIONS AND GUIDELINES ON THE MANAGEMENT OF FIXED ASSETS

Article 3. Regulations and guidelines on criteria for identifying fixed assets

1. Criteria for identifying tangible fixed assets

Tangible fixed assets are those with physical form, having an independent structure or consisting of several separate parts interconnected to perform one or more specific functions, satisfying both of the following criteria simultaneously:

a) Having a useful life of one year or longer;

b) Having an original cost of ten million dong or more.

2. Criteria for identifying intangible fixed assets

Intangible fixed assets are those without physical form but are managed and used by units or have been invested in to create assets, satisfying both of the criteria specified in Point a and Point b of Clause 1 of this Article.

Article 4. Classification of fixed assets

1. Classification based on the nature and characteristics of the assets, including:

a) Tangible fixed assets

- Type 1: Buildings and construction works; including: Villas, special-grade construction works; Grade I, Grade II, Grade III, Grade IV construction works.

- Type 2: Architectural structures; including: Warehouses, tanks, parking lots, drying yards, playgrounds, sports fields, swimming pools; wells, walls; other architectural structures.

- Type 3: Motor vehicles; including: Motor vehicles for serving official duties; motor vehicles for general use; specialized motor vehicles; motor vehicles for state guest services; other motor vehicles.

- Type 4: Other transportation means (excluding motor vehicles); including: Road transportation means; railway transportation means; waterway transportation means; air transportation means; other transportation means.

- Type 5: Machinery and equipment; including: Common office machinery and equipment; machinery and equipment for unit-wide activities; specialized machinery and equipment; other machinery and equipment.

- Type 6: Long-lived plants and working animals and/or those producing products; including: Various types of livestock; long-lived plants, orchards; industrial plantations; fruit orchards.

- Type 7: Other tangible fixed assets.

b) Intangible fixed assets

- Type 1: Land use rights.

- Type 2: Copyrights and related rights.

- Type 3: Industrial property rights.

- Type 4: Rights over plant varieties.

- Type 5: Application software.

- Type 6: Brand of public service organizations (including factors such as capability, quality, reputation, historical depth, and other factors capable of generating economic benefits for public service organizations).

- Type 7: Other intangible fixed assets.

2. Classification based on the source of formation of the assets, including:

a) Fixed assets formed through purchase;

b) Fixed assets formed through construction investment;

c) Fixed assets transferred through allocation or transfer;

d) Fixed assets received as gifts or promotional items;

đ) Fixed assets discovered during inventory checks that were not previously recorded in accounting books;

e) Fixed assets formed from other sources.

Article 5. Subjects Recorded in Fixed Asset Accounting Books

1. Assets used independently and identified as a single subject for fixed asset accounting books.

2. A system consisting of multiple individual asset parts interconnected to jointly perform one or several specific functions, such that the absence of any part renders the entire system non-operational, shall be identified as a single subject for fixed asset accounting books.

3. A system comprising multiple individual asset parts interconnected, where each component has a different usage period and independent operational function, and requires separate management of each asset part, each part shall be identified as a subject for fixed asset accounting books.

4. Working livestock and/or those producing products, with each animal valued at 10,000,000 VND (ten million dong) or more, shall be identified as a subject for fixed asset accounting books.

5. Independent land plots containing gardens with a value of 10,000,000 VND (ten million dong) or more (excluding the value of land use rights); or individual long-term trees with a value of 10,000,000 VND (ten million dong) or more shall be identified as a subject for fixed asset accounting books.

Article 6. Principles of Fixed Asset Accounting

1. Each fixed asset can only be accounted for at one level of the unit.

2. All existing fixed assets within the unit must be fully, accurately, and timely recorded in terms of quantity and current value; changes during the usage process.

3. In all cases, fixed asset accounting must respect the principle of valuing fixed assets based on their original cost (actual formation cost), depreciation value, and residual value.

4. Fixed assets that have been decided to be removed from inventory by the competent authority, or fixed assets that are damaged and cannot be used, shall not be valued for accounting purposes.

Article 7. Determination of Original Cost of Tangible Fixed Assets

The determination of the original cost of tangible fixed assets as stipulated in point a, Clause 1, Article 4 of this Circular is as follows:

1. The original cost of fixed assets formed through purchases is determined according to the following formula:

Where:

a) Trade discounts, price reductions, or penalties imposed on sellers (if applicable) are amounts deducted from the invoice value when the invoice value includes trade discounts, price reductions, or seller penalties.

b) Other costs (if applicable) are reasonable expenses directly related to the purchase of fixed assets incurred by the unit up to the time the fixed assets are put into use. In cases where common costs arise for multiple fixed assets, these costs should be allocated to each fixed asset based on appropriate criteria (quantity, invoice value of the fixed asset generating common costs).

2. The original cost of fixed assets formed through construction investment is the settlement value approved by the competent authority in accordance with laws on construction investment.

a) In cases where assets have been put into use (due to completion of construction investment) but have not yet received approval from the competent authority, the unit shall record and account for the fixed assets from the date of the Acceptance Certificate for putting the assets into use. The recorded original cost is a provisional cost. In this case, the provisional cost is selected in the following order of priority:

- Proposed settlement value;

- Value determined by the Acceptance Certificate A-B;

- Approved project budget value.

b) When the settlement value is approved by the competent authority, the unit adjusts the provisional cost recorded in the accounting books to the approved settlement value; simultaneously re-determines the remaining value indicators, cumulative depreciation of the fixed asset to adjust the accounting books and conduct accounting as prescribed.

c) In cases where a project includes multiple components or assets (subjects recorded in fixed asset accounting books) without separate budgeting or settlement for each component or asset, the approved budget or settlement value should be allocated to each component or asset based on appropriate criteria (construction area, quantity, detailed budget value of each asset or component) for recording in the accounting books.

3. The original cost of transferred or assigned fixed assets is determined as follows:

Where:

a) The value recorded on the Transfer and Acceptance Certificate of the asset is the original cost of the fixed asset being monitored in the accounting books or the remaining value of the transferred or assigned fixed asset based on reassessment before presenting to the competent authority for decision on transfer or assignment (for assets not yet monitored in the accounting books).

Units with transferred assets or tasked with formulating plans for handling assets are responsible for reassessing the value of the assets (for assets not yet monitored in the accounting books) before presenting to the competent authority for decision on transfer or assignment of the assets. The reassessment of asset value is based on the remaining quality of the asset and the actual new purchase price of the asset at the time of transfer.

Where:

- The percentage of remaining quality of the asset is determined based on the condition of the asset, the depreciation period of similar assets, and the usage period of the asset.

- The purchase price of the asset is the market price of a new asset of the same type at the time of transfer.

- The new construction cost of the asset is determined according to the following formula:

b) Other costs (if any) are reasonable expenses directly related to the acceptance of fixed assets received or transferred, which the entity receiving the fixed assets has incurred up to the time the fixed assets are put into use. In cases where common costs arise for multiple fixed assets, allocate the costs to each fixed asset based on appropriate criteria (quantity, value of fixed assets generating common costs).

(Example 1 in Appendix No. 03 issued together with this Circular).

4. The original cost of fixed assets received as gifts or through promotional activities shall be determined as follows:

Where:

a) The value of the gifted asset is determined according to the provisions of the laws on establishing the ownership of all people over assets and handling assets that have been established as owned by all people.

b) The value of the asset obtained through promotional activities is determined by the agency, organization, unit, or enterprise receiving the promotion based on the market price of similar assets or those with the same technical standards and origin.

c) Other costs (if any) are reasonable expenses directly related to the acceptance of fixed assets received as gifts or through promotional activities, which the entity receiving the fixed assets has incurred up to the time the fixed assets are put into use. In cases where common costs arise for multiple fixed assets, allocate the costs to each fixed asset based on appropriate criteria (quantity, value of fixed assets generating common costs).

5. The original cost of fixed assets discovered in excess during inventory checks, obtained during combat and work operations but not yet recorded in accounting books, shall be determined as follows:

Where:

a) The value recorded in the Inventory Check Report is the remaining value of the fixed assets discovered in excess at the time of the inventory check, obtained during combat and work operations.

Agencies, organizations, units, and enterprises conducting the inventory check must re-evaluate the value of the assets to record in the Inventory Check Report and determine the original cost to record in the accounting books. The re-evaluation of the asset's value is based on the remaining quality of the asset and the actual purchase price of a new asset of the same type at the time of the inventory check.

Where:

- The percentage of remaining quality of the asset is determined based on the asset, the depreciation period of similar assets, and the usage period of the asset.

- The purchase price of the asset is the market price of a new asset of the same type at the time of the inventory check.

- The construction cost of the asset is determined according to the following formula:

b) Other costs (if any) are reasonable expenses incurred by the agency, organization, unit, or enterprise up to the time the fixed assets are put into use. In cases where common costs arise for multiple fixed assets, allocate the costs to each fixed asset based on appropriate criteria (quantity, value of fixed assets generating common costs).

Article 8. Determining the Original Cost of Intangible Fixed Assets

1. The original cost of intangible fixed assets is the right to use land

a) In cases where it is necessary to determine the value of the right to use land for inclusion in the asset value of the entity:

- Land is transferred by the State without payment of land use fees according to the laws on land for special-purpose construction projects, management service facilities; construction projects of public institutions for non-business purposes;

- Land is leased by the State according to the laws on land, exempting land lease payments for the entire lease period or paying the lease fee once for the entire lease period with the lease fee paid from the state budget for construction projects of self-financing public institutions; non-agricultural production and business land that is not residential land; agricultural, forestry, aquaculture, salt-making combined with defense and security tasks of enterprises or units;

- Land received through the transfer of the right to use land where the transfer payment has been made from the state budget.

The original cost of intangible fixed assets is the right to use land determined as follows:

b) Basis for determining the value of the right to use land:

The basis for determining the value of the right to use land for inclusion in the asset value of the entity is the area of land and the land price.

- The area of land is the area recorded in the Certificate of Right to Use Land, Ownership Certificate of Housing and Property Attached to Land (hereinafter referred to as the Certificate) or the Decision on Allocation of Land, Lease of Land by the competent state agency, or the Land Lease Contract (in cases where there is no Certificate).

In cases where there is no Certificate or Decision on Allocation of Land, Lease of Land, or Land Lease Contract issued by the competent state agency, the entity using the land shall base its determination of the land area used on relevant documents related to the right to use land as the basis for determining the value of the right to use land;

- The land price is determined based on the land price in the Provincial People's Committee's Land Price Table multiplied by (x) the land price adjustment coefficient prescribed by the Provincial People's Committee at the time of determining the value of the right to use land.

The land price in the Land Price Table and the land price adjustment coefficient are determined as follows:

+ For land allocated without payment of land use fees for special-purpose construction projects, management service facilities; construction projects of public institutions that have not yet achieved financial autonomy, the land price and the land price adjustment coefficient are determined based on residential land;

+ For agricultural, forestry, aquaculture, salt-making land or agricultural, forestry, aquaculture, salt-making land combined with defense tasks, which are allocated by the State without payment of land use fees or leased with exemption of land lease payments for the entire lease period or leased with the lease fee paid from the state budget, the land price and the land price adjustment coefficient are determined based on the corresponding type of land;

+ For land leased by the State for construction projects and used for non-agricultural production and business purposes that are not residential land, the land price and the land price adjustment coefficient are determined based on the corresponding type of land used for non-agricultural production and business purposes according to the land use term.

- In cases where the right to use land is transferred, the land price for determining the value of the right to use land is the actual transfer price or the auction-winning price for the right to use land (if transferred through an auction process) but not lower than the land price in the Provincial People's Committee's Land Price Table multiplied by (x) the land price adjustment coefficient. If the actual transfer price or the auction-winning price for the right to use land is lower than the land price in the Provincial People's Committee's Land Price Table multiplied by (x) the land price adjustment coefficient prescribed by the Provincial People's Committee at the time of determining the value of the right to use land, then the land price will be determined according to this provision.

c) Determination of the value of the right to use land:

- For entities and enterprises that are allocated land by the State without payment of land use fees or have transferred the right to use land for long-term stable use, the value of the right to use land is determined by multiplying the land area by (x) the land price as stipulated in point b, Clause 1 of this Article.

- For entities that are leased land by the State with the lease fee paid from the state budget or exempted from paying the lease fee for the entire lease period, or have transferred the right to use leased land, the value of the right to use land is determined as follows:

- The determination of the value of the right to use land must be documented in writing according to Model No. 02a-ĐK/TSC-QSDĐ issued together with this Circular. The document determining the value of the right to use land is prepared in two copies; one copy for the entity or enterprise using the land to keep; one copy sent to the direct superior management agency (if applicable).

2. For land leased by the State with payment of the lease fee once for the entire lease period according to the laws on land, where the lease fee paid does not originate from the state budget, and land received through the transfer of the right to use land where the transfer payment does not originate from the state budget, the amount is the lease fee paid once for the entire lease period plus (+) compensation and land clearance costs in cases where the State leases land with payment of the lease fee once for the entire lease period (if applicable and in cases where compensation and land clearance costs have not been included in project investment capital, not included in production and business costs, or not approved by the competent authority to offset against the lease fee payable).

3. Adjustment of the value of the right to use land

a) Entities and enterprises must adjust the value of the right to use land for accounting purposes in the following cases:

- At the beginning of the fiscal year when the Provincial People's Committee promulgates and publishes the Land Price Table according to the laws on land.

- When there is a change in the area of land used compared to the area of land whose value of land use rights has been determined in the following cases:

+ Conducting a land inventory in accordance with the provisions of the law;

+ When there is a decision by a competent state agency to reclaim, supplement, or transfer, or receive an additional portion of land area in accordance with the provisions of the law;

+ Other cases that result in a change in the land area confirmed by a competent state agency;

- Changing the purpose of land use according to the decision of a competent state agency;

- When conducting an inventory and reassessing the value of state assets according to the decision of the competent authority or person;

- When submitting to the competent authority or person for a decision to sell the office premises, the operating base, using the office premises, the operating base to participate in a project under the public-private partnership model, formulating a plan to use the operating base for business purposes, leasing, joint ventures, or joint operations.

b) The adjustment of the value of land use rights must be documented in writing according to Model No. 02b-ĐK/TSC-QSDĐ issued together with this Circular. The document adjusting the value of land use rights shall be prepared in two copies; one copy shall be retained by the entity or enterprise using the land; one copy shall be sent to the direct superior management agency (if any).

4. The original cost of intangible fixed assets prescribed in point b, Clause 1, Article 4 of this Circular (excluding land use rights) is the total of all expenses incurred by the entity to acquire such intangible fixed assets.

Article 9. Use of Original Cost of Fixed Assets

1. The original cost of fixed assets determined in accordance with Articles 7 and 8 of this Circular shall be used for accounting records and asset declarations.

2. The original cost of fixed assets determined in accordance with Articles 7 and 8 of this Circular shall not be used in cases where organizations sell assets, transfer land use rights, determine values for joint venture contributions, joint operations, use fixed assets to settle debts to investors when implementing construction-transfer contracts, or use fixed assets to participate in projects under the public-private partnership model.

Article 10. Change in Original Cost of Fixed Assets

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

a) Reassessing the value of fixed assets according to the decision of a competent state agency;

b) Implementing upgrades, expansions, or repairs of fixed assets according to a project approved by the competent authority or person;

c) Removing or installing additional parts of fixed assets;

d) Adjusting the value of land use rights in cases prescribed in Clause 3, Article 8 of this Circular.

2. When changes occur in the original cost of fixed assets (excluding land use rights as prescribed in point d, Clause 1 of this Article), the entity shall prepare a Record detailing the reasons for the change in original cost; simultaneously, re-determine the original cost and residual value of the fixed assets to adjust the accounting records and perform accounting in accordance with regulations.

(Example 2 in Appendix No. 03 issued together with this Circular).

In cases where the upgrade, expansion, or repair project of fixed assets includes multiple components or different objects recorded in the fixed asset accounting books but are not settled separately for each component or object, allocate the settlement value approved by the competent authority or person to each component or object based on appropriate criteria (construction area, quantity, detailed budgeted costs for upgrading, expanding, or repairing each asset or component) to record in the accounting books.

3. When changes occur in the original cost of fixed assets which are land use rights, the entity shall prepare a Record detailing the reasons for the change in original cost; simultaneously, re-determine the value of land use rights to adjust the accounting records and perform accounting in accordance with regulations.

The original cost of intangible fixed assets which are land use rights in cases prescribed in Clause 1, Article 8 of this Circular shall be re-determined including the re-determined land use rights value plus (+) taxes (excluding refundable tax amounts) and fees and charges as prescribed by laws on fees and charges.

The re-determination of the value of land use rights shall be carried out according to the formula prescribed in point c, Clause 1, Article 8 of this Circular with indicators regarding land area, land use purpose, land price, and land price adjustment factor at the time of re-determining the value of land use rights.

Article 11. Management of Fixed Assets

1. All existing fixed assets at units and enterprises shall be strictly managed in terms of physical items and value in accordance with the provisions of laws on management and use of state assets and related laws.

2. Units and enterprises are responsible for establishing fixed asset cards and accounting for all existing fixed assets of the unit in accordance with the current accounting regulations; conducting annual inventory checks on existing fixed assets; reporting to the higher-level financial authority to unify accounting adjustments between the results of the inventory check and the accounting books (if necessary); and reporting on the management and use of fixed assets as prescribed in this Circular.

3. Fixed assets that have been fully depreciated but are still usable must continue to be managed in accordance with the provisions of the law.

Section 2. PROVISIONS AND GUIDELINES ON DEPRECIATION AND AMORTIZATION OF FIXED ASSETS

Article 12. Scope of Fixed Assets Subject to Depreciation and Amortization

1. All existing fixed assets at units and fixed assets transferred by the State to enterprises for management, excluding the State capital component in enterprises, must be subject to depreciation and amortization, except for cases specified in Clause 2 and Clause 3 of this Article.

2. Fixed assets at public service units must be amortized according to the provisions of Article 16 of this Circular, including:

a) Fixed assets at public service units that self-fund regular expenses and investment;

b) Fixed assets at public service units that must fully amortize fixed assets into service prices as prescribed by law;

c) Fixed assets of public service units not covered by point a and point b of this clause, which are used for business operations, leasing, joint ventures, and associations without forming new legal entities as prescribed by law.

3. The following types of fixed assets are not subject to depreciation or amortization:

a) Fixed assets that are land use rights where it is necessary to determine the value of land use rights to include in the asset value as prescribed in Clause 1, Article 8 of this Circular;

b) Fixed assets being leased for use;

c) Fixed assets held in custody, safekeeping, or storage for the State;

d) Fixed assets that have been fully depreciated or fully amortized but are still usable;

đ) Fixed assets that have not been fully depreciated or fully amortized but are damaged and cannot be used further.

Article 13. Principles for Calculating Depreciation and Amortizing Fixed Assets

1. Principles for Calculating Depreciation of Fixed Assets

a) The calculation of depreciation of fixed assets is carried out once a year in December, before closing the accounting books. The scope of fixed assets subject to depreciation includes all existing fixed assets as prescribed in Clause 1, Article 1 of this Circular up to December 31 of the year of depreciation;

b) Fixed assets as prescribed in point c, Clause 2, Article 12 of this Circular shall calculate depreciation and amortize fixed assets according to the provisions of Article 16 of this Circular;

c) In cases of transfer, division, merger, or dissolution of units, the depreciation of fixed assets for the fiscal year in which the competent authority decides on the transfer, division, merger, or dissolution of the unit shall be carried out by the receiving unit;

d) In cases where fixed assets are inventoried and revalued according to the decision of the competent authority, the depreciation of fixed assets shall be determined based on the revalued value after the inventory from the fiscal year in which the competent authority determines the revalued value.

2. Principles for Amortizing Fixed Assets

a) The principle of amortizing fixed assets for fixed assets as prescribed in point a and point b, Clause 2, Article 12 of this Circular shall be implemented according to the provisions applicable to enterprises;

b) For fixed assets as prescribed in point c, Clause 2, Article 12 of this Circular, the amortization of fixed assets shall be carried out from the date the fixed assets are used for business operations, leasing, joint ventures, and associations, and shall cease after the end of their use for such activities;

c) Amortization costs of fixed assets must be allocated to each activity of public services, business operations, leasing, joint ventures, and associations to account for the costs of each corresponding activity.

Article 14. Determination of the period of use and depreciation rate of fixed assets

The period of use and depreciation rate of fixed assets shall be implemented in accordance with the provisions set out in Appendix No. 01 attached hereto.

For fixed assets of units that discover excess upon inventory, such units shall re-determine the period of use and depreciation rate of the discovered excess fixed assets as the basis for accounting of fixed assets.

Article 15. Method for calculating depreciation of fixed assets

1. The annual depreciation amount of each fixed asset shall be calculated according to the following formula:

Annually, based on determining the increase and decrease in depreciation amounts arising in the year, the unit calculates the total depreciation amount of all fixed assets at the agency, organization, unit, enterprise for that year according to the following formula:

2. For fixed assets whose original cost has changed, the unit bases on the original cost indicators, residual value of fixed assets after reassessment in accordance with Article 10 of this Circular, the depreciation rate of fixed assets as prescribed in Article 14 of this Circular to continue calculating depreciation of fixed assets for the remaining years.

3. For fixed assets received from transfer, division, merger, dissolution of units, the annual depreciation amount of fixed assets recorded in the accounting books of the receiving unit shall be calculated according to the formula prescribed in Clause 1 of this Article; wherein the original cost of fixed assets is determined in accordance with Clause 3 of Article 7 of this Circular, the depreciation rate of fixed assets as prescribed in Clause 1 of this Article.

4. The depreciation amount of fixed assets for the final year within the period of use of the fixed assets is determined as the difference between the original cost and the accumulated depreciation amount already implemented of such fixed assets.

Article 16. Provisions and guidance on setting aside depreciation of fixed assets

1. For fixed assets prescribed in points a, b, c of Clause 2 of Article 12 of this Circular used entirely for business operations, leasing, joint ventures, joint operations, the unit implements management and sets aside depreciation in accordance with regulations applicable to enterprises.

The unit prepares and sends information on the depreciation rate, the depreciation amount in the year (according to Form No. 03-ĐK/TSC prescribed in Appendix No. 02 attached hereto) to the tax administration authority directly, and simultaneously sends it to the Department of Finance under the Ministry of National Defense for monitoring and management; the deadline for submission is before January 1st of each year.

2. Adjustment of the depreciation rate of fixed assets prescribed in Clause 1 of this Article shall be carried out as follows:

a) For fixed assets prescribed in point a of Clause 2 of Article 12 of this Circular, in cases where setting aside depreciation according to Clause 1 of this Article affects the operation of public service organizations, the public service organization reports to the superior management authority (if any) to submit to the Minister of National Defense for consideration and decision on adjusting the depreciation rate of fixed assets to ensure quality and the price of public service products provided by the organization;

b) For fixed assets prescribed in point b of Clause 2 of Article 12 of this Circular, in cases where setting aside depreciation according to Clause 1 of this Article affects the operation of public service organizations, the public service organization reports to the superior management authority (if any) to submit to the Minister of National Defense for consideration and decision on adjusting the depreciation rate of fixed assets to ensure compliance with the pricing schedule for public service products issued by the competent authority in accordance with regulations and not lower than the depreciation rate of fixed assets prescribed in this Circular;

c) For fixed assets prescribed in point c of Clause 2 of Article 12 of this Circular used entirely for business operations, leasing, joint ventures, joint operations, if necessary, setting aside depreciation according to the depreciation rate of fixed assets prescribed in this Circular, the unit using the assets reports to the superior management authority (if any) to submit to the competent authority or person with approval authority for approval of the project using the assets for business operations, leasing, joint ventures, joint operations to consider and decide on adjusting the depreciation rate of fixed assets appropriately.

3. For fixed assets prescribed in point c of Clause 2 of Article 12 of this Circular (excluding fixed assets being trademarks of public service organizations) used both for business operations, leasing, joint ventures, joint operations and for activities according to the functions and tasks of public service organizations, the following shall be implemented:

a) The unit calculates and determines the total depreciation value in the year of fixed assets according to the depreciation rate of fixed assets prescribed in this Circular;

b) Based on the period of use, frequency of use or volume of work completed, the unit calculates and allocates the depreciation amount and depreciation in the total depreciation value already determined in point a of this clause; prepares and sends information on the depreciation amount and depreciation of fixed assets in the year (according to Form No. 03-ĐK/TSC prescribed in Appendix No. 02 attached hereto) to the tax administration authority directly, and simultaneously sends it to the Department of Finance under the Ministry of National Defense for monitoring and management; the deadline for submission is before January 1st of each year;

c) The unit implements allocation of the registered depreciation amount to record in the accounting costs of providing public service products, business costs, leasing, joint ventures, joint operations; records the depreciation of fixed assets in the accounting for the depreciation amount.

(Example 3 in Appendix No. 03 attached hereto).

4. For fixed assets being trademarks of public service organizations used for joint ventures, joint operations prescribed in point c of Clause 2 of Article 12 of this Circular, the following shall be implemented:

a) The determination of the value of the trademark of the public service organization for contribution to joint ventures, joint operations shall be carried out in accordance with the guidelines of the Vietnamese Valuation Standards System, intellectual property laws, and related laws as the basis for the competent authority or person with approval authority to approve the value of the trademark of the organization contributing to joint ventures, joint operations.

b) The value of the brand of a public service unit for joint venture and joint operation capital contribution, approved by the competent authority, shall be allocated corresponding to the time period of the joint venture and joint operation as stipulated in the project using assets for joint venture and joint operation purposes, to be recorded in the accounting costs for the duration of the joint venture and joint operation.

5. Management and utilization of depreciation funds:

a) For public service units that have not yet achieved financial autonomy (budgetary units), the depreciation funds for fixed assets as prescribed in Clauses 1, 2, 3, and 4 of this Article, which were invested in or purchased from state budget sources or have a state budget origin, or those fixed assets purchased from raised capital, the units may use such funds to repay principal and interest; the remainder shall be supplemented into the unit's fund.

b) For public service units that have achieved financial autonomy, the depreciation funds for fixed assets as prescribed in Clauses 1, 2, 3, and 4 of this Article shall be implemented according to the Project approved by the Ministry of National Defense.

Chapter III

FIXED ASSET REPORT

Section 1. FIXED ASSET DECLARATION REPORT

Article 17. Form and Content of Fixed Asset Declaration Report

1. Form of Fixed Asset Declaration Report

a) The initial declaration report shall apply to fixed assets currently under management and use at the time this Circular takes effect but have not been declared as required by Circular No. 120/2015/TT-BQP dated October 30, 2015, issued by the Minister of National Defense;

b) The supplementary declaration report shall apply to cases where there are changes in fixed assets due to investment construction, procurement, handover; establishment of national ownership rights over assets; recovery, transfer, reallocation, destruction, sale, liquidation, write-off due to loss or damage, and other forms of handling as prescribed by the competent authority; change in asset usage function according to the decision of the competent authority; the entity responsible for declaring fixed assets changes its name, splits, merges, or dissolves according to the decision of the competent authority;

c) Periodic declaration reports shall be prepared and submitted by units managing and using fixed assets to their superiors up to the Ministry of National Defense (Financial Department).

2. Content of Fixed Asset Declaration Report:

a) Units entrusted with the management and use of fixed assets must prepare declaration reports in accordance with the model prescribed in this Circular. The declaration report on fixed assets must accurately and fully record information as prescribed in the model;

b) The agency receiving and managing the declaration report on fixed assets has the right to reject and request resubmission if it finds that the declaration report does not accurately and fully record the information. The head of the unit responsible for submitting the declaration report bears legal responsibility for the accuracy of the reported information.

3. Deadline for Fixed Asset Declaration Report

a) For the case prescribed in point a, Clause 1 of this Article, the unit or enterprise must complete the process before December 31, 2018;

b) For the case prescribed in point b, Clause 1 of this Article, within no more than 30 days from the date of change. For assets put into use formed through investment construction, upgrade, or renovation, the change period starts from the date of the Acceptance Certificate for putting into use.

Article 18. Model for Initial Declaration Report and Supplementary Declaration Report on Fixed Assets

The model for declaration report on fixed assets is prescribed as follows:

1. Initial declaration report and supplementary declaration report on fixed assets at the unit:

a) Newly constructed, purchased, or received fixed assets for use at the unit: Declare according to Form No. 04a-ĐK/TSC, Form No. 04b-ĐK/TSC, and Form No. 04c-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

b) Change information about the unit using the asset according to Form No. 06a-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

c) Change information about the workplace, public service base according to Form No. 06b-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

d) Change information about motor vehicles according to Form No. 06c-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

đ) Change information about other fixed assets according to Form No. 06d-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

e) Delete information about fixed assets according to Form No. 07-ĐK/TSC attached as Appendix No. 02 issued together with this Circular.

2. Initial declaration report and supplementary declaration report on fixed assets managed by enterprises without being counted as state capital at the enterprise shall be implemented corresponding to each type of asset managed by the enterprise, land; natural resources: Declare according to Form No. 02a-ĐK/TSC-QSDĐ, Form No. 02b-ĐK/TSC-QSDĐ attached as Appendix No. 02 issued together with this Circular.

3. Initial declaration report and supplementary declaration report on assets serving the operation of projects funded by state capital:

a) Newly constructed, purchased, or received assets for use in project operations: Declare according to Form No. 05a-ĐK/TSDA, Form No. 05b-ĐK/TSDA, and Form No. 05C-ĐK/TSDA attached as Appendix No. 02 issued together with this Circular;

b) Change information about the unit using the asset according to Form No. 06a-ĐK/TSC attached as Appendix No. 2 issued together with this Circular;

c) Change information about the workplace, public service base according to Form No. 06b-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

d) Change information about motor vehicles according to Form No. 06c-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

đ) Change information about other fixed assets according to Form No. 06d-ĐK/TSC attached as Appendix No. 02 issued together with this Circular;

e) Delete information about fixed assets according to Form No. 07-ĐK/TSC attached as Appendix No. 02 issued together with this Circular.

4. Initial declaration report and supplementary declaration report on assets established with full ownership rights shall be implemented in accordance with the Government's regulations on management and disposal of assets established with full ownership rights and guiding documents.

Article 19. Model for Periodic Declaration Report on Fixed Assets

1. The model for periodic declaration report on fixed assets is prescribed as follows:

a) General status report on the current use of fixed assets according to Form No. 08a-ĐK/TSC attached as Appendix No. 02 issued together with this Circular, including three parts: General Summary, Detailed by Type of Unit, and Detailed by Each Unit.

b) Report on the increase and decrease in fixed assets according to Form No. 08b-ĐK/TSC attached as Appendix No. 02 issued together with this Circular, including three parts: General Summary, Detailed by Type of Unit, and Detailed by Each Unit.

2. Units are responsible for submitting periodic declaration reports on fixed assets to higher levels up to the Ministry of National Defense (through the Finance Department) along with the Report on the Management and Use of Fixed Assets.

Article 20. Related Documents Concerning the Formation and Changes in Fixed Assets

1. For houses and land:

a) Decision on allocating land, leasing land; Land lease contract; Certificate of land use right; documents determining the value of land use rights as prescribed;

b) Documents related to the approval of projects, designs, completion drawings, acceptance, handover, and putting construction works into use;

c) Decision on allocating, transferring houses and land to units; handover records of houses and land;

d) Documents related to recovery, transfer, sale, liquidation of houses;

đ) Other related files and documents.

2. For motor vehicles:

a) Decision on purchasing motor vehicles by agencies or authorized persons; motor vehicle purchase contracts; motor vehicle purchase invoices;

b) Decision on allocating, transferring motor vehicles to units; handover records of motor vehicles; Motor Vehicle Registration Certificate;

c) Documents related to recovery, transfer, sale, liquidation, change of usage function, and other forms of handling motor vehicles;

d) Other related files and documents.

3. For other assets at units:

a) Approval documents for purchasing assets by agencies or authorized persons; asset purchase contracts; asset purchase invoices;

b) Decisions on allocating, transferring assets to units; asset handover records;

c) Documents related to recovery, transfer, liquidation, sale, destruction, reduction, change of usage function, and other forms of handling assets;

d) Other related files and documents.

4. Related documents concerning the formation and changes in fixed assets as stipulated in Clauses 1, 2, and 3 of this Article shall be established and stored by the units directly managing and using the assets.

For fixed assets that must be registered for ownership and usage rights according to the law, if the competent authority requires submission of original documents when registering, the unit shall retain copies of those documents.

Section 2. REPORT ON THE MANAGEMENT AND USE OF FIXED ASSETS

Article 21. Report on Fixed Assets

1. For the following types of fixed assets assigned to units and enterprises for management and use, they shall report to the superior financial department up to the Financial Bureau:

a) Fixed assets at the unit including: buildings, land; all types of motor vehicles; other fixed assets (excluding special assets);

b) Fixed assets transferred by the State to enterprises for management, excluding state capital components in such enterprises (excluding special assets serving defense tasks);

c) Assets serving the activities of projects using state capital;

d) Assets established with full ownership rights of the people.

2. The report on fixed assets as stipulated in Clause 1 of this Article includes:

a) Declaration report on fixed assets as prescribed in Section 1 of this Chapter;

b) Report on the situation of management and use of fixed assets.

Article 22. Contents of the Report on the Situation of Management and Use of Fixed Assets

The contents of the report on the situation of management and use of fixed assets by units assigned to manage and use fixed assets and their superiors up to the Ministry level are as follows:

- The current status of the management and use of fixed assets by the unit;

- Evaluation of positive aspects, effectiveness, existing issues, and violations in the management and use of fixed assets by the unit during the reporting period;

- Evaluation of the implementation of conclusions and recommendations of supervisory, inspection, and state audit agencies regarding the management and use of fixed assets during the reporting period;

- Guidance, supervision, and inspection work on the management and use of public assets by units under their jurisdiction;

- Recommendations for measures to improve the legal system and enhance the effectiveness of the management and use of fixed assets.

Article 23. Procedure and Deadline for Reporting on the Situation of Management and Use of Fixed Assets

1. Procedure for Reporting on the Situation of Management and Use of Fixed Assets

The annual report on the situation of management and use of fixed assets is prepared by units assigned to manage and use fixed assets and submitted to the direct superior (up to the Ministry of National Defense through the Financial Bureau) for consolidation and reporting to the Government (through the Ministry of Finance).

2. Deadline for Reporting on the Situation of Management and Use of Fixed Assets

Annually, units assigned to manage and use fixed assets must submit reports on the management and use of the previous year's fixed assets as specified in Article 4 of this Circular within the following deadlines:

a) Units under the Ministry must submit their reports to the Financial Bureau before February 28; subordinate units must submit their reports to units under the Ministry of National Defense before January 31;

b) The Ministry of National Defense (Financial Bureau) must submit its report to the Ministry of Finance before March 15 each year.

3. Ad hoc Reports on the Situation of Management and Use of Fixed Assets upon Request of Competent Authorities.

Chapter IV

IMPLEMENTATION

Article 24. Transitional Provisions

1. For fixed assets of units that have been declared and accounted for until December 31, 2018 without changes in the useful life and depreciation rate between this Circular and Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense, from January 1, 2019 onwards, the provisions of this Circular shall apply.

2. For fixed assets with changes in useful life and depreciation rate between this Circular and Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense, the following shall be implemented:

a) From December 31, 2018 and earlier, units shall implement the provisions of Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense;

b) From January 1, 2019 onwards, the following shall be implemented:

- For fixed assets currently managed and used which have extended useful lives as provided in this Circular and Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense and have already been fully depreciated, units shall continue to manage them until the end of their useful lives as stipulated in Article 14 of this Circular, without further depreciation except in cases where the original cost increases as provided in points a, b, and d of Clause 1 of Article 10 of this Circular;

- For fixed assets currently managed and used until December 31, 2018 which have not yet been fully depreciated according to Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense but have extended useful lives as provided in this Circular and Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense, from January 1, 2019 onwards, the depreciation rate as provided in this Circular shall be applied until full depreciation is achieved but before the end of the useful life, units shall continue to manage them until the end of their useful lives as stipulated in Article 14 of this Circular, without further depreciation except in cases where the original cost increases as provided in points a, b, and d of Clause 1 of Article 10 of this Circular.

Article 25. Effective Date

1. This Circular takes effect from March 18, 2019 and applies from January 1, 2019.

2. This Circular replaces Circular No. 120/2015/TT-BQP dated October 30, 2015 issued by the Minister of National Defense concerning the management regime, depreciation regime, and reporting regime for specialized fixed assets and fixed assets serving management operations at units under the Ministry of National Defense.

Article 26. Responsibility for Implementation

1. The Director of the Financial Bureau and the Heads of related agencies and units are responsible for implementing this Circular.

2. The costs for implementing the management regime, depreciation regime, and reporting regime for fixed assets shall be guaranteed by the state budget.

3. The Director of the Financial Bureau shall take the lead and coordinate with relevant agencies to organize the implementation and supervise the enforcement of this Circular. Any difficulties encountered during implementation should be promptly reported to the Ministry of National Defense (through the Financial Bureau) for study and resolution./.