Decision No. 222/TC-CĐKT Issuing Accounting Regulations for Fixed Assets in State-Owned Enterprises

Pursuant to …;

OF THE MINISTRY OF FINANCE NUMBER 222-TC/CKT OCTOBER 11, 1980 ISSUING THE ACCOUNTING REGIME FOR FIXED ASSETS IN STATE ENTERPRISES

THE MINISTER OF FINANCE

Pursuant to Decree No. 61-CP dated March 29, 1974 and Decision No. 90-CP dated April 18, 1978 of the Council of Ministers promulgating the charter on organization and operation of the Ministry of Finance;
Pursuant to the Accounting Charter for State Accounting issued pursuant to Decree No. 175-CP dated October 28, 1961;
Pursuant to the experiences distilled from the process of rectifying and improving the accounting work for fixed assets at units and enterprises under various national economic sectors;
After reaching consensus with the General Statistics Office and relevant Ministries and Sectoral Management Agencies,

Pursuant to …;

Article 1 - Now promulgates the accounting regime for fixed assets in state enterprises attached hereto, applicable to all units and enterprises under production and business sectors without distinction of nature and scale of operations, aiming to supplement, amend and perfect the current regulations to guide the uniform implementation of the state management regime for fixed assets, making accounting data become a solid basis among information sources about fixed assets, enhancing the role of monetary control over the formation, utilization and modernization of fixed assets.

Article 2 - Relevant Ministries and Sectoral Management Agencies shall guide the appropriate application of this accounting regime according to the situation and characteristics of their respective sectors to be uniformly applied by subordinate units and enterprises, as well as those under local management. The directors of enterprises and heads of units, economic organizations shall be responsible for organizing the implementation of this accounting regime according to the guidance of the Ministries and Sectoral Management Agencies. Provincial People's Committees and municipalities directly under the central government, together with Ministries and Sectoral Management Agencies, shall inspect the implementation of this accounting regime in units and enterprises under local management, as well as other units and enterprises located in their jurisdictions.

Article 3 - This decision takes effect from the date of issuance. Previous regulations on accounting for fixed assets that conflict with this decision are hereby abolished./.

 

REGULATIONS ACCOUNTANT

FIXED ASSETS IN STATE ENTERPRISES

(Issued pursuant to Decision No. 222-TC/CĐKT dated October 11, 1980 of the Ministry of Finance)

Chapter 1:

GENERAL PRINCIPLES

Article 1 - Fixed assets are labor means with unit value of 500 dong or more, with usage period exceeding one year, and special labor means considered as fixed assets according to the current depreciation regime for fixed assets (Decision No. 215-TC/CĐTC dated October 2, 1980). Labor means lacking any of the aforementioned conditions are considered working tools belonging to circulating assets.

Article 2 - Fixed assets of enterprises are classified uniformly according to the current classification in the national economy, including:

1. Buildings,

2. Construction works,

3. Machinery and power equipment,

4. Working machinery,

5. Transmission equipment,

6. Tools,

7. Working measuring and testing instruments,

8. Transport equipment and vehicles,

9. Management tools,

10. Working animals and breeding animals.

11. Long-term plants,

12. Other fixed assets (including investment costs considered as fixed assets).

Besides the above classification, in accounting books, fixed assets of enterprises are also classified according to other classifications prescribed in the current state accounting-reporting regime (such as classification by function, classification by source of capital...).

Article 3 - Accounting for fixed assets has the following responsibilities:

- Recording, reflecting, and summarizing fully, truthfully, and promptly the quantity, value, and status of existing fixed assets in the entire enterprise and at each using unit;

- Recording and reflecting the utilization of each object of fixed assets, each type of fixed assets, and the entire fixed assets at each using unit and throughout the enterprise; calculating and determining the efficiency of fixed asset utilization;

- Accurately calculating and recording the amount of depreciation of fixed assets charged to product cost or circulation expenses, timely calculating and recording the value of depreciation of fixed assets. Supervising the payment of basic depreciation to the state, superiors, and repayment of bank loans according to the state regulations;

- Timely recording and accurately calculating costs related to repairing fixed assets, promptly calculating the cost of large-scale repair projects completed, supervising the proper use of the large-scale repair fund, compliance with cost standards and budgets for large-scale repairs;

- Promptly recording the results of liquidation of fixed assets and accurately determining losses or benefits due to the premature or delayed liquidation of fixed assets before or after the stipulated usage period;

- Preparing accounting reports on fixed assets, analyzing the situation of equipping, mobilizing, preserving, and utilizing fixed assets; proposing measures to continuously strengthen maintenance, renovation, and improve the utilization capacity of fixed assets.

Article 4 - Fixed assets are reflected in accounting books and reports at original cost (initial value). The original cost of fixed assets includes all costs related to the construction or acquisition of fixed assets, including transportation, installation costs, and other basic construction costs. The original cost of fixed assets minus their depreciated value is called the remaining value of fixed assets. The remaining value of fixed assets is the current fixed capital of the enterprise.

The original cost of fixed assets in specific cases is determined as follows:

- The original cost of newly constructed, self-manufactured, or newly purchased fixed assets is the value recorded as increased fixed capital in the approved final settlement report of the completed project.

- The original cost of transferred or acquired fixed assets from other enterprises or agencies is the original cost recorded in the approved fixed asset transfer receipt, minus old costs (if any) for transportation, installation, trial run, etc., plus new costs (if any) for transportation, installation, trial run, etc., before use.

- The original value of fixed assets that have been revalued according to the State's decision is the new price calculated under current conditions (restoration price) for the revaluation of fixed assets.

ARTICLE 5 - The original value of each object of fixed assets recorded in books and financial reports remains unchanged throughout the entire period of existence of the fixed assets at the enterprise, except for the following cases:

1. Installation, modernization of parts increasing the value of fixed assets.

2. Removal of some parts of fixed assets reducing the value of fixed assets.

3. Revaluation of fixed assets according to the State's decision.

Article 6 - For long-term leased fixed assets, the leasing enterprise still records the original value of the leased fixed assets in its balance sheet, while the lessee enterprise must record the value stated in the contract outside the balance sheet.

If the lessee enterprise invests its own capital to construct additional works, install additional equipment, or modernize certain parts of the leased fixed assets as agreed upon in the contract between both parties, then the lessee enterprise must account for such additional construction works and installations as part of its fixed assets and must carry out depreciation.

Upon expiration of the contract, the lessee enterprise returns the fixed assets including any additional construction works or modernizations to the lessor enterprise. At the time of handover, both parties record the original value and the amount of depreciation of the additional construction works or installations according to the accounting method for the transfer of fixed assets between two enterprises.

Chapter 2:

ORGANIZATION OF FIXED ASSET ACCOUNTING

Article 7 - Fixed asset accounting must be recorded on a per-object basis (referred to as the fixed asset recording object).

The fixed asset recording object is a complete structure consisting of all attached components and spare parts, or individual structures used independently to perform specific functions, or a combination of multiple structures performing a specific function together.

Ministries and General Departments in charge shall base their specific regulations on the general provisions above and the guide (Annex No. 1) to define the fixed asset recording objects for each type of fixed assets uniformly applicable to enterprises under their management.

Article 8 - Each fixed asset recording object, regardless of whether it is in use or in reserve, must have a unique number.

The fixed asset number is a set of digits arranged in a specific order to indicate the type of fixed asset, group of fixed assets, and the fixed asset recording object within the group. The number allocated for each group of fixed assets must be sufficient to record existing fixed assets and those expected to increase in the coming years within that group of fixed assets.

For fixed asset recording objects composed of multiple separate parts, in addition to the common number of the fixed asset recording object, there may also be sub-numbers assigned to each part.

Article 9 - The fixed asset number is established by the accounting department in coordination with the mechanical and electrical engineering department (or corresponding functional department) of the enterprise and managed by the accounting department to be recorded on vouchers, fixed asset accounting books when there is an increase in fixed assets, and communicated to other using departments or painted directly on the fixed asset recording object.

The fixed asset number of each fixed asset recording object remains unchanged throughout the period of use or storage of the fixed assets at the enterprise.

The fixed asset numbers of fixed asset recording objects that have been liquidated or sold to another enterprise cannot be reused for newly received fixed assets.

For leased fixed assets, the lessee enterprise must not change the number assigned by the lessor but must use the existing number immediately.

Article 10 - Each fixed asset record object must have a complete original file, including technical files (fixed asset history, design drawings, and other related documents concerning characteristics, features, and usage conditions of the fixed assets) and accounting files (including delivery and receipt records of fixed assets, completion records of major repair deliveries of fixed assets, copies of technical documents related to the monitoring of usage and depreciation of fixed assets...).

Technical fixed asset files are established and kept by the mechanical and electrical engineering department (or corresponding functional departments); accounting fixed asset files are established and kept by the accounting department. Each set of files for each fixed asset record object must be numbered, clearly indicating the identification number of the fixed asset record object, and must be neatly organized and stored according to the type of fixed asset.

Article 11 - Detailed accounting by fixed asset record objects is handled by the accounting department and carried out on fixed asset cards uniformly prescribed by the State (initial recording system).

Each fixed asset record object must have its own separate fixed asset card for tracking purposes.

For similar fixed assets with small value (as defined by each industry), numerous quantities, identical utility and value, received at the same time and used in the same place (workshop, department), a single card may be opened, but each individual object must be listed and identified on the card.

For complex fixed assets consisting of multiple parts, the fixed asset card must fully list the name and characteristics of each part.

Article 12 - The basis for establishing fixed asset cards is the original files of the fixed assets (technical and accounting files). The card must include all contents such as the name of the fixed asset, the identification number of the fixed asset... location of the fixed asset, original cost of the fixed asset, depreciation rate, amount of depreciation already extracted, major repair costs, construction and additional equipment costs, etc. The technical characteristics of the fixed asset and its components must be briefly recorded on the card but must reflect the basic characteristics of that fixed asset.

Article 13 - Completed fixed asset cards must be registered in the enterprise's fixed asset ledger and stored in the fixed asset card box located in the enterprise's accounting department.

The enterprise's fixed asset card box must be designed for convenient arrangement, inspection, and daily use of the cards. The fixed asset card box is divided into three main compartments:

- The first compartment stores fixed asset cards currently used in core production and business activities.

- The second compartment stores fixed asset cards currently used outside core production and business activities.

- The third compartment stores various types of fixed asset cards remaining.

Each main compartment is further divided into smaller compartments to arrange fixed asset cards to meet classification and tracking requirements for the use of fixed assets within the enterprise. In the first compartment: fixed assets currently used in core production and business activities, fixed asset cards are arranged according to structural classification (buildings, architectural structures, transmission machinery and equipment, etc.), and within each category, cards are arranged by using units. In the second compartment: fixed assets currently used outside core production and business activities, cards are arranged by activity fields (according to non-core production and business units), and within each field, cards are arranged by structure. In the third compartment, fixed asset cards are arranged by different types: fixed assets undergoing major repairs, fixed assets awaiting liquidation, unused fixed assets, reserve assets... and temporarily store cards of fixed assets that have been liquidated, transferred, or sold.

Article 14 - In addition to property cards for each individual asset, each group of fixed assets (by structure) must establish a fixed asset increase and decrease accounting card (Annex No. 2) to monitor the total value of fixed assets currently held by group, changes in circumstances, depreciation amounts, and major repair costs for each group of fixed assets to facilitate monthly reconciliation with general accounting records and periodic reports on increases and decreases in fixed assets. The fixed asset increase and decrease accounting card is maintained throughout the year (one sheet per year), with each month recorded in a separate line, and at the end of each quarter, six months, and the year, the totals must be summed up. The card is stored in the card box at the first position corresponding to each group of fixed assets. Article 15 - All changes in fixed assets occurring within the month (such as increases or decreases in fixed assets, fixed assets sent for major repairs, completed major repairs on fixed assets, depreciation of fixed assets, relocation of fixed assets...) must be promptly recorded in the individual fixed asset cards based on original documents (fixed asset delivery and receipt certificates, fixed asset liquidation certificates...). At the end of each month, accountants must base on the aforementioned original documents to compile data for recording in the fixed asset increase and decrease accounting card by group and use the data from the fixed asset increase and decrease accounting card by group to reconcile with the general accounting records. At the end of each quarter, six months, and the year, the general accounting department will consolidate data from the fixed asset increase and decrease accounting cards by group to serve as the basis for preparing periodic accounting reports on increases and decreases in fixed assets.

Article 16 - Each enterprise and each using unit (workshop, production team...) must establish a fixed asset ledger (Annex No. 3) to record all current fixed assets of the enterprise and each using unit. In the ledger, fixed asset objects are arranged in an order consistent with the arrangement of fixed asset cards by group in the card box. The total number of fixed asset objects recorded in the ledger must match the total number of fixed asset objects recorded on the fixed asset cards in the card box. The fixed asset ledger is the primary accounting book that legally verifies the quantity of fixed assets that the enterprise and each using unit should have. FIXED ASSET INCREASE ACCOUNTING

Article 17 - For any case of increasing fixed assets due to any cause (completion and transfer of basic construction projects, purchases, self-manufacturing, receiving from other enterprises without payment...) and through any source of capital (state budget funds, long-term bank loans, enterprise-owned capital), the enterprise must complete acceptance procedures and prepare a fixed asset delivery and receipt certificate according to the unified model prescribed by the State (initial recording system). The fixed asset delivery and receipt certificate must be prepared for each individual fixed asset object. For similar management tools and equipment of the same price per unit, accepted simultaneously by the same unit, a joint delivery and receipt certificate can be prepared.

Chapter 3:

The fixed asset delivery and receipt certificate is prepared by the acceptance committee in two copies, signed by the acceptance committee, the delivering party, and the receiving party, each party retains one copy after it has been confirmed by the chief accountant and approved by the enterprise director.

Based on the fixed asset delivery and receipt certificate and related technical documents and other supporting documents, the accounting department proceeds with the following actions: - Assigning identification numbers to fixed assets and recording these numbers on the fixed asset delivery and receipt certificates.

- Establishing fixed asset cards for each individual object and placing them in the corresponding compartments in the card box.

- Recording the enterprise's fixed asset ledger and the fixed asset ledger by using unit.

Article 18- - Preparing accounting files for each individual fixed asset object and transferring all technical documents of the fixed asset to the technical department for preservation and use.

- Recording the increase in the value of fixed assets and fixed capital in the general accounting books at the original cost.

For construction projects and additional installations for existing fixed assets, the increased value of new fixed assets is recorded as an increase in fixed assets and fixed capital, and simultaneously added to the original cost of the fixed asset object being constructed or installed on the fixed asset card. If adding the supplementary entry to the old fixed asset card is difficult, a new fixed asset card may be established to replace the old card, but the old card must be attached for easy reference when needed.

For fixed assets transferred from other enterprises without payment, the increase in the value of fixed assets and fixed capital of the enterprise is recorded at the original cost as stipulated in Article 5, while also recording an increase in the value of fixed asset depreciation and a reduction in fixed capital equivalent to the basic depreciation already deducted reflected on the fixed asset delivery and receipt certificate based on the accounting data of the transferring enterprise.

- Establish accounting records for each fixed asset object, transfer all technical documents of fixed assets to the technical maintenance and usage department.

- Record the increase in value of fixed assets and permanent capital of the enterprise at original cost in the general accounting books.

Article 19 - For construction projects and additional equipment for existing fixed assets, the increased value of new fixed assets shall be recorded as an increase in fixed assets and permanent capital, and simultaneously added to the original cost of the constructed or equipped fixed asset objects on the fixed asset card. In cases where adding to the old fixed asset card is difficult, a new fixed asset card may replace the old one, but the old fixed asset card must be attached for easy reference when necessary.

Article 20 - For fixed assets transferred without payment from other enterprises and used by the enterprise, the value of fixed assets and permanent capital of the enterprise shall be recorded at the original cost specified in Article 5, while increasing the value of depreciation of fixed assets and reducing the permanent capital by the amount of basic depreciation already deducted reflected in the fixed asset transfer receipt based on the accounting data of the transferring enterprise.

Article 21 - For fixed assets acquired from another enterprise, the enterprise must determine the original cost of the fixed asset according to the provisions of Article 5, and record an increase in the value of fixed assets and fixed capital, while recording an increase in depreciation expense and a decrease in fixed capital equal to the difference between the original cost of the fixed asset sold (excluding old costs for transportation, installation...) and the agreed price reflected in the asset transfer document.

1. Inspect and supervise the Credit Fund's operations in accordance with the law; In the case of converting working tools belonging to current assets into fixed assets, based on the decision of the competent authority, record an increase in the value of fixed assets, a decrease in the value of working tools belonging to current assets, and an increase in fixed capital, a decrease in current capital according to the original cost of the working tool.

If the working tool belonging to current assets has been used before being converted into a fixed asset, record a decrease in current capital and an increase in fixed capital according to the remaining value. The portion of the value allocated to production costs of the currently used working tool is transferred to the depreciation value of the fixed asset by recording an increase in the depreciation value of the fixed asset and a decrease in the allocation to the working tool belonging to current assets.

Article 23 - For investment costs for land reclamation, earth removal for construction and mine shaft renovation, salinity and acidity renovation, channel dredging..., which are included in fixed assets, enterprises shall record an increase in the value of fixed assets and fixed capital each year by the actual cost of completed investment projects put into use during the reporting year. In cases where investment projects span multiple years (such as land reclamation...), enterprises may record an increase in the value of fixed assets and fixed capital each year by the actual cost incurred during the reporting year, confirmed and approved by competent authorities for areas already put into use or exploitation, without waiting until the completion of the entire project.

For interest on bank loans arising during the preparation and construction of projects, which are not included in the value of corresponding fixed assets, when the project settlement is approved, it must be recorded as a separate fixed asset item to recover capital through gradual depreciation included in production costs or circulation fees and monitored for payment. The source of funds for paying this interest is similar to the source of funds for paying investment loans.

Article 24 - For long-term leased fixed assets, both the leasing enterprise and the leasing-out enterprise must complete handover procedures and sign a lease agreement for fixed assets, the accounting unit of the lessee must record the original cost of the fixed asset in an account outside the balance sheet and file a copy of the fixed asset card transferred by the lessor into the leased fixed asset section of the fixed asset card box.

Article 25 - For construction works or additional installations to leased fixed assets as stipulated in Article 7, the lessee enterprise must complete acceptance procedures, prepare an asset transfer document for the additional construction or installation, record an increase in the value of fixed assets and fixed capital of the enterprise, and create a fixed asset card for the construction or additional installation work.

Chapter 4:

FIXED ASSET UTILIZATION ACCOUNTING

Article 26 - All fixed assets currently owned by the enterprise, regardless of their source of formation, must be fully mobilized and utilized effectively for the enterprise's production and business activities. The enterprise shall bear material responsibility and be encouraged materially under the State regime regarding the preservation, maintenance, and effective utilization of all current fixed assets of the enterprise.

Article 27 - The enterprise accounting department must organize the accounting of fixed asset usage at each team, production squad, workshop, and throughout the entire enterprise to closely monitor and inspect the situation and effectiveness of fixed asset usage within the enterprise, primarily those fixed assets directly involved in production and business activities (power machinery and equipment, transmission machinery and equipment, working machinery and equipment...).

Article 28 - Daily accounting of fixed asset usage is conducted on a per fixed asset and per type of fixed asset basis, including the following main indicators:

- Quantity of machinery and equipment mobilized and utilized;

- Actual capacity of machinery and equipment mobilized;

- Actual operating time of machinery and equipment and downtime due to various causes;

- Fuel and power consumption...

- Quantity of products or volume of work completed.

Article 29 - Fixed asset usage accounting is carried out based on initial documents uniformly prescribed by the State (documents tracking the operation of machinery and equipment) and comprehensive usage ledgers of fixed assets for each team, squad, workshop, and enterprise as specified by each enterprise in accordance with the characteristics of fixed asset usage and management requirements at each enterprise (Annex No. 4).

Article 30 - Initial documents tracking the operation of machinery and equipment are recorded daily by the machine operators, the primary responsible person for the machine (in cases where multiple workers operate a single machine) or the team leader (in cases where an entire team operates a single machine) based on the actual operational status of the machinery and equipment they are responsible for and the quantity of products (or volume of work) completed, which have been technically verified.

At the end of each shift, the team leader signs and confirms and transfers the initial documents tracking the operation of machinery and equipment to the workshop (squad) accounting staff.

Article 31 - Based on the initial documents tracking the operation of machinery and equipment received daily, the workshop (squad) accounting staff records the comprehensive usage ledger of fixed assets for each team, squad, and workshop, and reports daily or periodically every three or five days (depending on specific requirements at each enterprise) to the workshop manager and squad production leader about the usage of machinery and equipment within the workshop and squad, while preparing a comprehensive report on fixed asset usage along with the initial documents tracking the operation of machinery and equipment and recommendations sent to the enterprise accounting department to compile the overall situation of fixed asset usage within the enterprise.

Article 32 - Periodically (yearly, quarterly, monthly...), each enterprise, workshop, team, and production squad must organize mass analysis of machinery and equipment usage within their unit for the month, quarter, or year, confirming achievements, shortcomings, assessing potential, and measures to fully mobilize and utilize this potential.

Key data and materials necessary for analysis include:

- Total current fixed assets and allocation and usage of fixed assets within the enterprise;

- Quantity and capacity of fixed assets mobilized and utilized compared to total current fixed assets;

- Actual working time of fixed assets compared to the total available time according to regulations, downtime due to various causes;

- Value of output produced per unit value of fixed assets;

- Profit level obtained per unit value of fixed assets.

And other necessary data and materials according to the requirements of each analysis session.

Chapter 5:

ACCOUNTING FOR DEPRECIATION AND THE VALUE OF WEAR AND TEAR OF FIXED ASSETS

1. Credit cooperatives may purchase and invest in fixed assets directly used for business operations at a ratio specified by the Governor of the State Bank. The initial value of fixed assets gradually depreciates during use and is recovered through depreciation charges included in production costs or circulation costs.

All current fixed assets in the enterprise (including those constructed or purchased using self-funded capital for administrative, public welfare, and investment expenses as stipulated in Article 23) must be subject to depreciation, except for special cases prescribed in the current fixed asset depreciation system.

Article 35 - Implementation of Reporting Systems Depreciation of fixed assets is carried out based on the original cost of the fixed asset and the depreciation rate specified for each category or group of similar fixed assets in the current national fixed asset depreciation standards.

For fixed assets used in special environments, where adjustment factors increasing or decreasing the depreciation rate are applied, when calculating depreciation, in addition to basing on general depreciation rates, adjustments must also be made based on the adjustment factors for depreciation rates (basic depreciation, major repair depreciation) as stipulated in the national fixed asset depreciation standards.

Article 35 - The calculation of depreciation for fixed assets must be conducted monthly based on the quantity of existing fixed assets at the beginning of the month, after excluding those fixed assets that are not subject to depreciation according to the prescribed regulations. Fixed assets increased or decreased during this month will begin to be included in the calculation of depreciation or cease to be depreciated from the start of the following month. The amount of depreciation calculated monthly must be separately accounted for basic depreciation and major repair depreciation.

To simplify the calculation of depreciation, enterprises may base their monthly calculations on the increase or decrease in fixed assets from the previous month to determine additional or reduced depreciation for the current month. The amount of depreciation calculated in the current month is determined by adding the depreciation already extracted in the previous month to the additional depreciation and subtracting the reduced depreciation in the current month.

3. The procedures for merger and separation are carried out in accordance with the law and the guidelines of the State Bank. The monthly amount of depreciation for fixed assets (basic depreciation and major repair depreciation) shall be recorded in corresponding expense accounts for production or circulation costs based on the purpose of using the fixed assets. Accounting entries shall record increases in the depreciation capital account (basic depreciation and major repair depreciation) and increases in related production costs or circulation cost accounts.

Article 37 - For construction projects that have been completed and put into use but have not yet completed the handover procedures, the basis for calculating monthly depreciation is the prescribed depreciation rate and the budgeted value of the project component or part reflected in the accounting books of the construction unit. The monthly depreciation (basic depreciation and major repair depreciation) shall still be recorded in production costs or circulation costs but not yet recorded as reduction in fixed capital.

Upon completion of the handover procedures and recording of fixed assets and fixed capital, adjustments shall be made to the previously recorded depreciation and the depreciation value of the fixed asset during its usage period shall be recorded to reduce fixed capital.

Article 38 - For fixed assets that have been fully depreciated (including fixed assets financed by bank loans) but are still usable according to Circular No. 260-TTg dated June 20, 1977 of the Prime Minister, enterprises must continue to calculate basic depreciation and major repair depreciation based on the prescribed depreciation rates and original cost of the fixed assets. The monthly depreciation extracted from these fixed assets shall be recorded in production costs or circulation costs without recording the depreciation value and reducing fixed capital. Enterprises may retain the basic depreciation to supplement the production development incentive fund or enterprise-specific funds. When transferring this depreciation to the fund, accounting entries shall record decreases in the depreciation capital account (basic depreciation) and increases in the enterprise fund accounts (production development incentive fund or specific fund), while transferring money from the bank deposit account to another bank deposit account (bank deposits for enterprise funds or specific funds).

Article 39 - Bankruptcy. For fixed assets that have not been fully depreciated and are damaged (due to subjective faults of the enterprise), the enterprise must identify the cause and the person responsible for material damage and proceed with liquidation procedures as stipulated in Circular No. 260-TTg of the Prime Minister. The undepreciated value (original cost minus the extracted basic depreciation) must be continued to be paid into the state budget or repaid to the bank (if the fixed asset was constructed or purchased with bank loans) and recorded as loss. The monthly payment to the state budget (or repayment to the bank) and allocation to losses shall correspond to the basic depreciation rate of the fixed asset when it was still usable. The undepreciated value shall be recorded in the depreciation capital account (basic depreciation) and gradually paid into the state budget (or repaid to the bank) and recorded as loss according to the prescribed accounting method. In cases where the enterprise uses the production development incentive fund (the basic depreciation extracted from the fixed assets mentioned in Article 38) to pay into the state budget (or repay the bank) for the loss due to incomplete depreciation, accounting entries shall record increases in depreciation capital, decreases in the production development incentive fund, and decreases in bank deposits for enterprise funds and decreases in depreciation capital.

Article 40 - For fixed assets leased to external parties for long-term periods, the lessor shall calculate and allocate the basic depreciation according to general regulations and record it as production and business costs outside the basic cost (if the entity specializes in leasing fixed assets, it shall be recorded as basic business costs).

The large repair depreciation amount shall be handled as follows depending on the agreement between both parties in the lease contract:

If the leasing enterprise is responsible for major repairs of the leased fixed assets, the leasing enterprise must calculate and allocate the large repair depreciation and record it as production and business costs outside the basic cost according to general regulations.

If the lessee enterprise is responsible for repairing the leased fixed assets, the lessee enterprise must calculate and allocate the large repair depreciation for the period of using the fixed assets as stipulated in Article 51 below.

Article 41 - The actual monthly basic depreciation amount deducted (after subtracting the basic depreciation amount payable to the Bank, payable to superiors, or retained by the enterprise according to prescribed regulations), the enterprise must promptly pay into the state budget, regardless of the payment level specified in the plan.

The actual monthly basic depreciation amount of fixed assets constructed or purchased with borrowed funds from the Bank, including the interest on the loan during the investment process as stipulated in Article 23, the enterprise must promptly repay to the Bank for the principal and interest, or promptly pay to the state budget if the fixed asset has fully repaid the loan but has not yet been fully depreciated.

For enterprises directly under a joint venture of enterprises, if the financial plan for the year specifies a portion of the basic depreciation to be paid to the joint venture to form a centralized construction fund, then each month the enterprise must promptly allocate and pay that portion of the basic depreciation to the joint venture authority according to the level set by the joint venture.

In all cases of paying basic depreciation mentioned above, the accountant shall reduce the account for depreciation capital (basic depreciation) and reduce the account for bank deposits regarding working capital. Specifically, for the case of paying the Bank to repay outstanding loans, the reduction must also be recorded in the long-term bank loan account and the loan repayment account for construction investment according to the accounting procedures prescribed.

1. Local authorities shall assist and create favorable conditions for credit unions to operate safely and effectively. The entire actual monthly amount of large repair depreciation extracted can be retained by the enterprise for the purpose of major repairs of fixed assets. This amount must be deposited into a separate account at the Bank (bank deposit for large repairs). Each month, the enterprise must request the Bank to transfer the actual amount of large repair depreciation extracted in the month from the bank deposit account for working capital to the bank deposit account for large repairs.

Article 44 - Relationships with the Central People's Credit Union. The value of wear and tear of fixed assets is determined for all existing fixed assets.

For fixed assets subject to depreciation, the monthly wear and tear value is the basic depreciation amount of those fixed assets that must be extracted in the month. For fixed assets not subject to depreciation, to determine the remaining value and ensure timely replenishment with allocated capital, the monthly wear and tear value must also be determined based on the original value of those fixed assets and the basic depreciation rate prescribed in the standard depreciation rates for fixed assets. The time to start calculating wear and tear or stop calculating wear and tear for fixed assets added or reduced in the year is carried out according to the time for calculating depreciation for added or reduced fixed assets as stipulated in Article 35.

The monthly determined wear and tear value of fixed assets is recorded as a reduction in the basic capital (fixed capital) of the enterprise (increasing the depreciation of fixed assets account, reducing the basic capital account).

Article 45 - Organizations, individuals, and members of credit unions who have outstanding achievements in building and developing credit unions, making significant contributions to the business activities of credit unions will be rewarded. The specific level of reward shall be decided by the Members' Congress. Determination of wear and tear value for each fixed asset item is conducted whenever necessary (such as liquidation, transfer, sale of fixed assets, change in depreciation rate...), based on the data reflected on the fixed asset card (or book) (such as the original value of fixed assets, month and year when the fixed assets were put into use, basic depreciation rate...).

Chapter 6:

ACCOUNTING FOR MAINTENANCE OF FIXED ASSETS

Article 45 - Repair of fixed assets includes two types: major repair of fixed assets and regular maintenance of fixed assets.

Major repair of fixed assets refers to repair works with relatively long cycles, complex repair levels, requiring replacement of the entire or most of the important parts or components that have been severely damaged in order to restore the technical performance and basic functions of the fixed assets. Regular maintenance of fixed assets involves minor repairs on individual parts to ensure that the fixed assets can operate normally between major repair cycles.

Ministries and General Departments managing enterprises shall specify the specific contents of major repair and regular maintenance work for each type of fixed asset based on the nature and characteristics of the repair work in their respective industries, to be uniformly applied to enterprises under their management. The regulations of central Ministries and General Departments shall also apply to enterprises in the same industry at local levels.

In cases where there are no unified regulations from Ministries and General Departments, the enterprise director may establish regulations for implementation within their own enterprise.

Article 46 - Annually, enterprises must base their plans for major repair and regular maintenance of fixed assets for the whole year on the usage system and technical condition of the fixed assets, dividing these plans into quarterly and monthly plans for each category and type of fixed asset.

The plan for major repair of fixed assets is decided by the enterprise director and approved by the superior supervising authority, while the plan for regular maintenance of fixed assets is decided by the enterprise director.

Article 47 - Based on the approved repair plan, the mechanical and electrical engineering department (or corresponding functional department) and the accounting department, together with relevant departments, prepare the budget for repair costs of fixed assets.

The budget for regular maintenance costs of fixed assets is prepared for each type of fixed asset and each management and usage unit (workshop, production unit...), based on the content and volume of repair work, material consumption norms, repair labor rates or repair service rates (in case of outsourcing).

The budget for major repair costs of fixed assets must be prepared for each major repair project of each fixed asset object based on the scale, level of repair, material and spare part requirements, and other necessary documents determined through inspection and analysis of the technical condition of the fixed asset objects to be repaired.

The budget for repair of fixed assets must be reviewed and approved by the enterprise director, and all expenditures for repair needs of fixed assets must be carried out within the framework of the approved budgets.

Article 48 - Each time major repair of fixed assets is conducted, the mechanical and electrical engineering department (or corresponding functional department) must notify the accounting department and the workshops and units with fixed assets to be repaired in advance, and assign tasks to the repair department (if repairing in-house) or enter into contracts with the contracting units (if repairing through tendering).

The accounting department must transfer the fixed asset cards for repair from the corresponding card box to the card box for fixed assets undergoing major repair in the card cabinet for monitoring and checking the repair situation, and open ledgers to record and aggregate costs and calculate the cost of each major repair project of fixed assets.

All initial documents reflecting repair costs (materials, labor, monetary capital...) for major repair of fixed assets must be prepared separately for each project and each fixed asset object undergoing major repair, and initial documents belonging to a particular project or fixed asset object undergoing major repair must be directly recorded in the production cost ledger opened for that project or fixed asset object.

Article 49 - Upon completion of a major repair project, the enterprise must complete acceptance procedures and prepare a completed fixed asset repair handover record according to the prescribed format by the State (initial recording system).

The record is made in duplicate, signed by the acceptance committee, representatives of the repair unit, and representatives of the unit with fixed assets to be repaired. After being confirmed by the chief accountant and approved by the enterprise director, one copy is given to the repair unit to keep, and the other copy is given to the unit with fixed assets to be repaired to record necessary items in the fixed asset ledger and then transferred to the enterprise's accounting department. Based on the completed fixed asset repair handover record, the accounting department records the approved value of the completed major repair of fixed assets on the fixed asset card, transfers the fixed asset card from the box for fixed assets undergoing major repair to the corresponding box in the card cabinet, and simultaneously reduces the source of major repair funds for fixed assets.

Article 50- Accounting for major repair costs of fixed assets should distinguish between the following cases:

- In the case where major repair work on fixed assets is carried out by auxiliary production units, auxiliary construction units, or main production workshops of the enterprise, all actual costs incurred during the repair process are aggregated into the auxiliary production, auxiliary construction, or main production accounts. The actual cost of completed major repair projects is recorded from the auxiliary production, auxiliary construction, or main production accounts to the consumption account, from which it is transferred to reduce the source of major repair funds.

- In the case where major repairs on fixed assets are conducted through tendering, the actual costs related to major repairs (the amount payable to the contractor) are recorded in the major repair account. Costs associated with transporting fixed assets to and from the enterprise are recorded in production costs or circulation costs (management expense category).

The value of scrap recovered during the major repair of fixed assets is deducted from the actual costs of major repairs on fixed assets.

Article 51- For major repair costs of leased fixed assets, accounting shall be carried out as follows depending on the contract provisions:

If the major repair costs are borne by the lessor, the lessor must organize accounting as stipulated in Article 50 above.

If the major repair costs are borne by the lessee, the lessee must base on the budgeted major repair costs to be carried out and pre-deduct a certain amount each month, recording it in the advance expense account and including it in the expenses of departments using leased fixed assets.

When carrying out major repairs on leased fixed assets, all actual costs of repairs are recorded according to specific circumstances as prescribed in Article 50. Upon completion of major repairs, the actual costs of major repairs are transferred to the advance expense account. If the actual costs of major repairs on leased fixed assets exceed the pre-deducted amount, additional deductions must be made to cover the difference and included in the expenses of the department using the leased fixed asset that month. If the pre-deducted amount exceeds the actual costs of major repairs, the excess is adjusted in red ink to reduce the pre-deducted amount already included in the expenses of departments using fixed assets.

When transferring fixed assets to the leasing enterprise, the enterprise leasing fixed assets must notify the leasing enterprise of the completed major repair costs as the basis for recording in the fixed asset ledger.

Article 52. Regular repair costs of fixed assets are included in monthly production costs or circulation costs.

In the case where regular maintenance is not evenly distributed among months, causing product costs or circulation costs to fluctuate irregularly, the enterprise may apply a method of pre-deducting a certain amount of regular repair costs of fixed assets. Monthly pre-deductions are recorded in the advance expense account and allocated to relevant production cost or circulation cost accounts. All actual regular repair costs of fixed assets incurred in a year must be fully included in the production costs or circulation costs of that year. Therefore, at the end of the year, if there is a balance in the advance expense account, this balance cannot be carried over to the next year but must be adjusted to increase or decrease the production costs or circulation costs in the reporting year.

The accounting for regular repair costs of leased fixed assets is carried out in the same manner as the accounting for regular repair costs of the enterprise's fixed assets.

Article 53- The accounting department of the enterprise must continuously monitor and supervise the implementation of repair plans and compliance with budgeted cost standards for fixed asset repairs; promptly identify and correct any confusion between major repairs and regular maintenance tasks; settle accounts in a timely, accurate manner, using the appropriate funds for completed fixed asset repair projects; periodically organize analyses to determine the effectiveness of fixed asset repair work within the enterprise and propose necessary decisions by the General Director to effectively utilize existing major fixed asset repair funds. ACCOUNTING FOR THE REDUCTION OF FIXED ASSETS AND INTERNAL TRANSFERS OF FIXED ASSETS WITHIN THE ENTERPRISE

Chapter 7:

Article 54- The reduction of fixed assets in enterprises mainly occurs due to liquidation, sale, or transfer of fixed assets to other agencies or enterprises according to the decision of the competent authority.

Article 55- All cases of liquidating fixed assets within the enterprise that are not included in the planned or unplanned liquidation of fixed assets, regardless of the cause (the fixed assets being damaged due to the end of their useful life or accidents caused by subjective or objective reasons), must have a decision from the authorized agency as stipulated in the State's regulations on the disposal of assets. Article 56- When conducting the liquidation of fixed assets, the enterprise must establish a liquidation committee. The members of the liquidation committee are designated by the General Director but must include representatives from technical, accounting, and fixed asset management departments.

The liquidation committee must prepare a liquidation record for fixed assets according to the model prescribed by the State (initial recording system). The liquidation record is made in two copies, signed and confirmed by the Chief Accountant of the enterprise and approved by the General Director. One copy is kept by the department holding the liquidated fixed assets, and the other is sent to the enterprise's accounting department as a basis for bookkeeping records. Article 57- When there are liquidated fixed assets, the accountant bases on the fixed asset card to determine the basic depreciation already deducted and the remaining value of the liquidated fixed assets; if the liquidated fixed assets were constructed or purchased with bank loans, the outstanding loan amount must be determined as the basis for preparing the liquidation record and handling the remaining value of the liquidated fixed assets according to the prescribed regulations.

Article 58- Costs incurred during the liquidation process of fixed assets are recorded as a reduction in working capital. In cases where the liquidation process extends over several months, the liquidation costs are initially aggregated into subsidiary production accounts (or construction accounts). Upon completion of the liquidation process, all actual liquidation costs aggregated on the subsidiary production or construction accounts are transferred and recorded as a reduction in working capital. The recovered value from the liquidation of fixed assets is recorded as an increase in working capital.

Article 59- Upon completion of the liquidation of fixed assets, based on the liquidation record of fixed assets, the accountant records necessary information on the fixed asset card, the unit's fixed asset ledger, files the fixed asset card and documentation into the archive box, reduces the fixed assets and fixed capital at original cost, and simultaneously reduces the depreciation value of the liquidated fixed assets.

Any surplus from the liquidation of fixed assets over the costs is used to supplement the production development incentive fund; therefore, the accountant must record the transfer of this difference from the basic capital account (working capital) to the enterprise fund account (production development incentive fund) and transfer money from the enterprise's bank deposit account (working capital) to another bank deposit account (bank deposits for enterprise funds). For enterprises that have not implemented the three-fund system, the surplus from the liquidation of fixed assets must be remitted to the state budget. When there is a disposal of fixed assets, the accountant bases on the fixed asset card to determine the amount of basic depreciation already deducted and the remaining value of the disposed fixed asset. If the disposed fixed asset was constructed or purchased with bank loans, the outstanding loan amount must be determined as the basis for preparing the fixed asset disposal record and handling the remaining value of the fixed asset according to the prescribed regulations.

Article 58- Costs incurred during the disposal process of fixed assets are recorded as a reduction in working capital. In cases where the disposal work spans multiple months, the disposal costs are first aggregated into the auxiliary production account (or auxiliary construction account). Upon completion of the disposal work, the actual disposal costs aggregated on the auxiliary production or construction account are transferred and recorded as a reduction in working capital.

The recovered value from the disposal of fixed assets is recorded as an increase in working capital.

Article 59- Upon completion of the disposal work, based on the fixed asset disposal record, the accountant records necessary information on the fixed asset card, the unit's fixed asset ledger, files the fixed asset card and disposal documentation in the archive box, and reduces the fixed assets and permanent capital at original cost, while also reducing the depreciation value of the disposed fixed assets.

Any surplus from the disposal of fixed assets over expenses shall be used to supplement the production development incentive fund. Therefore, the accountant must record this difference, transferring it from the basic capital account (working capital) to the enterprise fund account (production development incentive fund), and transferring funds from the enterprise's bank deposit account (working capital) to another bank deposit account (bank deposits for enterprise funds). For enterprises that have not implemented the three-fund system, the surplus from the disposal of fixed assets must be remitted to the state budget.

Article 60- Under normal production conditions of the enterprise, if there are surplus fixed assets that are not needed, the enterprise has the responsibility to report and request the higher-level management authority to transfer them elsewhere through sale. The sale price of fixed assets shall be agreed upon by both the buyer and seller according to the provisions of Circular No. 260/TTg dated June 20, 1977, issued by the Prime Minister.

When selling fixed assets, the enterprise must prepare a receipt for the transfer of fixed assets in two copies, with signatures from representatives of the receiving party and the transferring party. One copy is attached to the technical documents of the sold fixed assets and handed over to the receiving party, while the other copy is transferred to the accounting department of the enterprise as the basis for recording the sale of fixed assets after being confirmed by the Chief Accountant and approved by the General Director.

Based on the receipt for the transfer of fixed assets, the accountant records necessary information on the card and ledger of fixed assets, files the fixed asset card in the corresponding section of the file cabinet, and reduces the fixed assets and fixed capital as stipulated in Article 59.

Article 61- All transactions related to the sale of fixed assets are recorded through the non-basic production and business account. The Debit side of this account records the amount due to the state budget (or repayment to the bank) and the additional amount to be added to the production development incentive fund or special-purpose fund. The Credit side records the proceeds from the sale of fixed assets and the loss (in cases where the proceeds from the sale of fixed assets are less than the amount due to the state budget or repayment to the bank). When paying the state budget (or repaying the bank), the accountant records the reduction in the budget settlement account (or long-term bank loan account) and the reduction in the bank deposit account for working capital according to the prescribed accounting procedures. On the budget settlement account, payments to the state budget regarding the sale of fixed assets are recorded under the sub-account of other payments. When adding the difference between the proceeds from the sale of fixed assets and the amount due to the state budget (or repayment to the bank) to the production development incentive fund or special-purpose fund, the accountant simultaneously records the transfer of bank deposits for working capital to another bank deposit account (bank deposits for enterprise funds or special-purpose funds).

Article 62- In cases where fixed assets are transferred to another enterprise within the same industry through an increase or decrease in capital as decided by the higher-level management authority, the enterprise still needs to complete all procedures for the transfer of fixed assets as specified in Article 60. Based on the receipt for the transfer of fixed assets, the accountant records necessary information on the card and ledger of fixed assets, files the fixed asset card in the corresponding section of the file cabinet, and simultaneously reduces fixed assets and fixed capital as stipulated in Article 59.

Article 63- In cases where fixed assets are converted into tools of labor belonging to current assets, the enterprise must prepare a detailed declaration form for each item of fixed assets converted into tools of labor belonging to current assets, report it to the higher-level management authority for approval. Based on the decision of the higher-level management authority, the accountant reduces fixed assets and increases current assets (tools of labor belonging to current assets) at their original cost, while simultaneously reducing fixed capital and increasing working capital based on the remaining value of those fixed assets. The depreciation value of the converted fixed assets is transferred from the fixed asset depreciation account to the tool of labor depreciation account belonging to current assets.

Article 64- The transfer of fixed assets from one department to another within the enterprise must be authorized by the Enterprise Director. The accountant must work with representatives from the transferring and receiving departments to prepare a record of the internal transfer of fixed assets. After obtaining signatures from the representatives of both parties and approval from the Enterprise Director, the record is submitted to the enterprise accounting office.

Based on the record of the internal transfer of fixed assets, the accountant records the transfer record number and necessary contents in the asset card and ledger, simultaneously transferring the fixed asset card from the old user department's file to that of the new user department. Any costs related to the internal transfer of fixed assets (dismantling, transportation, installation, etc.) are accounted for in the relevant production cost accounts or circulation cost accounts.

Article 65- All cases of reduction of fixed assets as stipulated in Articles 55, 60, 62, and 63 above will lead to a decrease in the enterprise's fixed capital. Therefore, the enterprise accounting office must, through daily accounting records, closely monitor the procedures for the exit of fixed assets as prescribed in the current state management system; calculate and determine the benefits and losses arising in each case of liquidation, sale, or transfer of fixed assets, and on this basis, propose to the Enterprise Director to make the most effective decision for each case.

Chapter 8:

INVENTORY OF FIXED ASSETS

Article 66- The inventory of fixed assets aims to accurately determine the existing quantity of fixed assets in the enterprise compared to accounting records, assess the condition of preservation and utilization of fixed assets, and evaluate the actual capacity to improve the responsibility of each individual and department in maintaining and using fixed assets effectively.

Article 67- Fixed assets must be inventoried at least once a year before the end-of-year settlement report is prepared. Depending on specific circumstances, the Ministry, General Department, or Provincial Department in charge may specify the start date for the annual inventory of fixed assets for subordinate enterprises, but it cannot be earlier than October 1 of the reporting year. For fixed assets that are frequently operating away from the enterprise (such as cars, trains, ships, etc.), the enterprise must base the timing of the inventory on the operational schedule of these fixed assets, ensuring appropriate time for inventory before the last departure of the fixed assets from the enterprise in the year.

Article 68- The inventory of fixed assets must be conducted strictly in accordance with the current state regulations on asset inventory. Prior to starting the inventory, the enterprise must review all documentation for each fixed asset (including leased and held-for-others fixed assets), verify the status of asset cards and accounting ledgers. If any missing documents, cards, or ledgers are discovered during the review, the enterprise must collect or create them fully. Any errors in accounting records must be corrected promptly according to accounting principles.

Article 69- When conducting an inventory, the inventory team must directly examine and inspect each fixed asset, recording all relevant indicators on the inventory form. For fixed assets accompanied by spare parts or accessories, they must be inventoried individually, and the results recorded on the inventory form.

Article 70- Based on the original data from accounting books and the actual figures determined during the inventory, the inventory team must prepare a consolidated comparison table to identify excesses and shortages, draft reports detailing the current status and causes of each case of excess or shortage, and provide documentation for the handling of such cases by competent authorities at various levels according to their respective responsibilities and powers.

Article 71- The General Director of the enterprise is responsible for thoroughly researching and analyzing the results of the inventory and implementing necessary measures to address deficiencies in the management, use, and accounting of fixed assets discovered through the inventory, ensuring that the management and accounting of fixed assets within the enterprise are conducted in a strict and regulated manner in accordance with state regulations, while also guaranteeing the most efficient economic use of the fixed capital in the enterprise.

Article 72- Based on the decision of the General Director of the enterprise, the results of the inventory must be promptly reflected in the accounting books before closing the books and preparing the final settlement report.

For fixed assets of the enterprise not recorded in the books discovered during the inventory, the enterprise must base on the inventory documents and fixed asset files to establish fixed asset cards and books, simultaneously increasing the fixed assets and fixed capital.

If the fixed assets not recorded in the books are currently being used, the basic depreciation and major repair depreciation must be calculated and included in production costs or circulation costs, and the value of the depreciation of the fixed assets during the usage period must be accounted for.

For missing fixed assets discovered during the inventory that are outside the disposal authority of the General Director, the accountant must reduce the fixed assets and fixed capital, and transfer the remaining value of the fixed assets to working capital and record it under the account - damaged, missing, or excess assets awaiting resolution. Upon receiving the decision from the competent authority, the accountant will record the books according to the general provisions based on the disposal decision.

Chapter 9:

IMPLEMENTING PROVISIONS

Article 73- This fixed asset accounting system applies to all state-owned enterprises across all national economic sectors.

Article 74- For collective-owned enterprises, the relevant Ministries and General Departments shall base this system to guide its implementation appropriately according to the business characteristics and management requirements of each type of enterprise.