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

Pursuant to …;

Issuing regulations on fixed asset accounting in state-owned 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 issuing the charter on organization and operation of the Ministry of Finance;

Pursuant to the Accounting Organization Charter issued pursuant to Decree No. 175-CP dated October 28, 1961;

Based on the experiences accumulated during the process of rectifying and improving fixed asset accounting work at units and enterprises under various national economic sectors;

After reaching consensus through discussions with the General Statistics Office and relevant Ministries and State-Controlled Corporations,

Pursuant to …;

Article 1 - Now hereby promulgates the regulations on fixed asset accounting in state-owned enterprises attached hereto, applicable to all units and enterprises under production and business sectors regardless of their nature and scale of operations, aiming to supplement, amend and improve the current regulations to guide the uniform implementation of the State's management regime for fixed assets, making accounting data a solid basis among information sources on fixed assets, enhancing the role of monetary control over the formation, utilization and modernization of fixed assets.

Article 2 - Relevant Ministries and State-Controlled Corporations shall guide the appropriate application of these accounting regulations according to the situation and characteristics of their respective sectors to be uniformly applied by subordinate units and enterprises, as well as those managed by localities within the same sector. The directors of enterprises and heads of units, economic organizations shall be responsible for implementing these accounting regulations according to the guidance of the Ministries and State-Controlled Corporations. Provincial People's Committees and municipalities directly under the central government, along with the Ministries and State-Controlled Corporations, shall inspect the implementation of these accounting regulations in units and enterprises managed by localities, 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 fixed asset accounting that conflict with this decision are hereby abolished.

PART I

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

CHAPTER ONE
GENERAL PRINCIPLES

Article 1 - Fixed assets are production materials with individual unit values of 500 dong or more, with usage periods exceeding one year, and special production materials classified as fixed assets according to the current depreciation system (Decision No. 215-TC/CĐTC dated October 2, 1980). Production materials lacking any of the aforementioned conditions are considered working tools belonging to circulating assets.

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

1. Buildings,

2. Structures,

3. Machinery and power equipment,

4. Working machinery,

5. Transmission equipment,

6. Tools,

7. Measuring, testing, and working instruments,

8. Transport equipment and means,

9. Management tools,

10. Working animals and breeding animals.

11. Long-term plants,

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

In addition to the above classification, in accounting books, fixed assets of enterprises are also classified according to other classifications prescribed in the current state reporting accounting-statistical system (such as classification by function, classification by source of funds...).

Article 3 - Fixed asset accounting has the responsibility to:

- Record, reflect, and summarize comprehensively, accurately, and promptly the quantity and value of existing fixed assets, changes in quantity and value, and the current status of fixed assets throughout the enterprise and at each using unit;

- Record and reflect 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; calculate and determine the efficiency of fixed asset utilization;

- Accurately record and account for the amount of depreciation of fixed assets charged to product cost or circulation expenses, timely calculate and account for the value of depreciation of fixed assets. Supervise the payment of basic depreciation to the State, superiors, and repayment of bank loans according to the State's regulations;

- Timely record and account for repair costs of fixed assets, promptly calculate the cost of large-scale repair projects completed, supervise the proper use of the large-scale repair fund, compliance with repair cost standards and budgets;

- Timely record and account for the results of liquidation of fixed assets and accurately determine losses or benefits due to the premature or delayed liquidation of fixed assets before or after the specified usage period;

- Prepare accounting reports on fixed assets, analyze the situation of equipment, mobilization, preservation, and utilization of fixed assets; propose measures to continuously strengthen maintenance, repair, modernization, and enhance 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 related costs associated with the construction or acquisition of fixed assets, including transportation, installation costs, and other basic construction costs. The original cost of fixed assets minus the value of depreciation 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 an increase in fixed capital reflected 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 transfer receipt document, 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 cost of fixed assets revalued according to the State's decision is the new value calculated under current conditions (restored value) applied for the revaluation of fixed assets.

Article 5 - The original cost of each fixed asset recorded in the books and accounting reports shall not be changed throughout the entire period of existence of the fixed asset at the enterprise, except for the following cases:

1. Replacing or upgrading parts that increase the value of the fixed asset.

2. Removing some parts of the fixed asset that decrease its value.

3. Re-evaluating the fixed asset according to the decision of the State.

Article 6 - For long-term leased fixed assets, the leasing enterprise shall record the original cost of the leased fixed asset in its own balance sheet, while the lessee enterprise shall record the value stated in the lease contract outside its balance sheet.

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

Upon expiration of the contract, the lessee enterprise shall return the fixed asset including any additional construction or upgrades to the leasing entity. At the time of handover, both parties shall record the original cost and depreciation amount of the additional construction or equipment according to the method of fixed asset transfer accounting between two enterprises.

CHAPTER TWO
ORGANIZATION OF FIXED ASSET ACCOUNTING

, Clause 1, Clause 2 Article 7a of this Regulation. - Fixed asset accounting must be recorded separately for each individual fixed asset (referred to as the object of fixed asset recording).

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

Ministries and General Departments in charge shall base on the general provisions above and the guide (Appendix No. 1) to specify the objects of fixed asset recording for each type of fixed asset to uniformly apply to enterprises under their management.

Article 8 - Each object of fixed asset recording, 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 object within the group. The numbering system for each group of fixed assets must be sufficient to record existing fixed assets and those expected to be added in future years within that group.

For objects of fixed asset recording composed of multiple individual parts, in addition to the common number of the fixed asset, 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 and fixed asset accounting books when there is an increase in fixed assets, and to inform other usage departments or paint the number on the fixed asset.

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

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

For leased fixed assets, the lessee enterprise shall not change the number provided by the lessor but shall use the existing number directly.

Article 10 - Each object of fixed asset recording must have an original file, including technical files (fixed asset profile, design drawings, and other documents related to characteristics, features, and usage conditions of the fixed asset) and accounting files (including delivery receipts, completed major repair receipts, copies of relevant technical documents for tracking usage and depreciation of the fixed asset...).

Technical files of fixed assets are prepared and kept by the mechanical and electrical engineering department (or corresponding functional department); accounting files of fixed assets are prepared and kept by the accounting department. Each file of an object of fixed asset recording must be numbered, clearly indicating the number of the object of fixed asset recording, and must be neatly organized and stored according to the corresponding type of fixed asset.

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

Each object of fixed asset recording must have its own fixed asset card for monitoring.

For similar fixed assets of small value (as defined by each industry), numerous in quantity, identical in utility and value, received at the same time and used in the same place (workshop, department), a single card may be opened, but the card must list the name and number of each object.

For complex fixed assets comprising 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 documents of fixed assets (technical files and accounting files). On the card, all contents must be fully recorded: name of fixed asset, fixed asset number..., location of fixed asset, original value of fixed asset, depreciation rate, amount of depreciation already extracted, major repair costs, additional construction costs, etc... Technical characteristics of fixed assets and their components shall be briefly recorded on the card but must reflect the basic features of the 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 fixed asset card box of the enterprise must be designed to facilitate arrangement, inspection, and daily use of the cards. The card box is divided into three large compartments:

- The first compartment arranges cards of fixed assets currently used in core production and business activities.

- The second compartment arranges cards of fixed assets currently used outside core production and business activities.

- The third compartment arranges cards of other types of fixed assets.

Each large compartment is further divided into many smaller compartments to arrange fixed asset cards according to classification requirements and to monitor the usage status of fixed assets within the enterprise. In the first compartment: fixed assets currently used in core production and business activities, the cards are arranged according to structural classification (buildings, architectural structures, transmission machinery and equipment, etc.) and within each category, the cards are arranged by using units. In the second compartment: fixed assets currently used outside core production and business activities, the cards are arranged according to fields of activity (by non-core production and business units), and within each field, the cards are arranged according to structure. In the third compartment, the cards are arranged according to 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 individual fixed asset cards, each group of fixed assets (according to structure) must establish a fixed asset increase-decrease accounting card (Annex No. 2) to track the total value of current fixed assets by group, changes in situation, depreciation amounts, and major repair costs of each group of fixed assets to serve monthly reconciliation with general accounting and periodic accounting reports on increases and decreases in fixed assets. The group fixed asset increase-decrease accounting card is opened for the entire year (one sheet per year), with each month recorded in one line, and at the end of each quarter, six months, and the year, the totals must be summed up. The card is arranged in the card box at the first position corresponding to each group of fixed assets.

Article 15 - Any changes in fixed assets occurring during 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 handover records, fixed asset liquidation records...). At the end of each month, the accountant must base on the aforementioned original documents to compile data recorded in the group fixed asset increase-decrease accounting card and use the data from the group fixed asset increase-decrease accounting card to reconcile with the general accounting section. At the end of each quarter, six months, and the year, the general accountant compiles data from the group fixed asset increase-decrease accounting cards to serve as the basis for periodic accounting reports on increases and decreases in fixed assets.

Article 16 - At each enterprise and each department using fixed assets (workshop, production team...), a ledger of fixed assets (Annex No. 3) must be established to record all existing fixed assets of the enterprise and of each department using them. In the ledger, the objects of fixed assets shall be 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 ledger of fixed assets is the original accounting book that verifies legally the quantity of fixed assets that the enterprise and each department using them should have.

Chapter III
ACCOUNTING FOR INCREASES IN FIXED ASSETS

Article 17 - For any case of increasing fixed assets due to any cause (completion and handover of basic construction, purchase, self-production, receipt from another enterprise without payment...) and through any source of capital (state budget capital, long-term bank loans, enterprise's own capital), the enterprise must complete acceptance procedures and establish a fixed asset transfer document according to the unified model prescribed by the State (initial recording system).

The fixed asset transfer document must be established for each object recorded as a fixed asset. For similar management tools and equipment of the same unit price received at the same time from the same unit, a joint transfer document can be established.

The fixed asset transfer document is prepared by the acceptance committee in two copies, signed by the acceptance committee, the transferring party, and the receiving party, each party retains one copy which is transferred back to their respective enterprise's accounting department after being confirmed by the chief accountant and approved by the enterprise director.

Article 18- Based on the fixed asset transfer document and related technical documents and other vouchers, the accounting department will carry out the following tasks:

- Assigning identification numbers to fixed assets and recording these numbers on the transfer vouchers.

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

- Recording the ledger of fixed assets of the enterprise and the ledger of fixed assets by using units.

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

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

Article 19 - For construction projects and additional installations for existing fixed assets, the increased value of new fixed assets shall be accounted for as an increase in fixed assets and fixed capital, while simultaneously supplementing the original cost of the fixed asset object constructed or installed on the fixed asset card. In cases where it is difficult to make supplementary entries on the old fixed asset card, a new fixed asset card may be established to replace the old one, but the old fixed asset card must be attached for easy reference when necessary.

Article 20 - For fixed assets transferred from other enterprises without payment, the value of fixed assets and fixed capital of the enterprise shall be increased according to the original cost specified in Article 5, while also increasing the depreciation value of fixed assets and reducing the fixed capital by the amount of basic depreciation already deducted reflected on the fixed asset transfer document 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 of the selling party (excluding old costs for transportation, installation...) and the agreed price reflected on the fixed asset handover 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 record an increase in fixed capital and a decrease in current capital according to the original cost of the working tools.

If working tools belonging to current assets have been used before being converted into fixed assets, 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 tools is transferred to the depreciation value of fixed assets by recording an increase in the depreciation value of fixed assets and a decrease in the allocated amount of working tools belonging to current assets.

Article 23 - For investment costs related to land reclamation, earth removal for construction and mine shaft renovation, salinity and acidity renovation, channel dredging..., recorded as 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 accounted for as a separate fixed asset item to recover capital through gradual depreciation charged to 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 the handover procedures and sign a lease agreement for the fixed asset, with the accounting unit of the lessee recording the original cost of the fixed asset outside the balance sheet and filing a copy of the fixed asset card provided by the lessor into the leased fixed asset section of the fixed asset card box.

Article 25 - For construction works or additional installations added to leased fixed assets as stipulated in Article 7, the lessee enterprise must complete the acceptance procedures, prepare a handover document for the fixed asset 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 work or additional installation.

CHAPTER FOUR

FIXED ASSET UTILIZATION ACCOUNTING

Article 26 - All existing fixed assets of the enterprise, regardless of their source of formation, must be fully mobilized and utilized effectively and efficiently 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 existing fixed assets of the enterprise.

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

Article 28 - Daily fixed asset utilization accounting is conducted on a per fixed asset and per type of fixed asset basis and includes 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 according to various causes;

- Fuel and power consumption...

- Quantity of products or volume of work completed.

Article 29 - Fixed asset utilization accounting is carried out based on initial documents uniformly prescribed by the State (documents tracking the operation of machinery and equipment) and consolidated usage ledgers of 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 - Documents tracking the operation of machinery and equipment are recorded daily by machine operators, the primary responsible person for the machine (in cases where one machine is controlled by multiple workers), or the production team leader (in cases where the entire production team controls one machine) based on the actual operational status of the machinery and equipment they oversee and the quantity of products (or volume of work) completed, which have been technically verified.

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

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

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

Main data and materials necessary for analysis include:

- Total existing fixed assets and their allocation and utilization within the enterprise;

- Quantity and capacity of fixed assets mobilized and utilized compared to the total quantity and capacity of existing fixed assets;

- Actual working time of fixed assets compared to the total scheduled 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 FIVE
ACCOUNTING FOR DEPRECIATION AND THE WEAR AND TEAR VALUE OF FIXED ASSETS

Article 33 - The initial value of fixed assets depreciates gradually during the usage process and is recovered through depreciation charges included in production costs or circulation costs.

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

Article 34 - Depreciation of fixed assets is carried out based on the original cost of the fixed assets and the depreciation rates prescribed for each category or group of similar fixed assets within the current state-fixed asset depreciation schedule.

For fixed assets used in special environments, which are subject to adjustment factors increasing or decreasing the depreciation rate, when calculating depreciation, in addition to basing on general depreciation rates, they must also base on adjustment factors for increasing or decreasing depreciation rates (basic depreciation and major repair depreciation) as prescribed in the state-fixed asset depreciation schedule.

Article 35 - The calculation of depreciation of fixed assets must be conducted monthly, based on the quantity of fixed assets present at the beginning of the month, after excluding those fixed assets not subject to depreciation according to the prescribed regulations. Fixed assets that increase or decrease during this month will begin to be included in or excluded from depreciation calculations starting from the first day of the following month. The monthly depreciation amount must be separately calculated for basic depreciation and major repair depreciation.

To simplify the calculation of depreciation, enterprises may base their monthly depreciation calculations on the changes in fixed assets from the previous month, thereby determining the additional or reduced depreciation for this month. The depreciation amount for this month is determined by adding the depreciation amount from the previous month to the increased depreciation and subtracting the decreased depreciation for this 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 of fixed assets (basic depreciation and major repair depreciation) is recorded in corresponding expense accounts for production or circulation costs based on the purpose of using the fixed assets. Accounting entries increase the depreciation reserve account (basic depreciation and major repair depreciation) and increase related production costs or circulation cost accounts.

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

Upon completion of the handover procedures and recording of fixed assets and fixed capital, adjustments must be made to the previously recorded depreciation amounts and the wear and tear value of the fixed assets during the usage period must be determined to record a reduction in 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 accrue basic depreciation and major repair depreciation based on the depreciation rate and the original cost of the fixed assets. The monthly depreciation accrued for these fixed assets shall be recorded as production costs or circulation expenses without reducing the value of wear and tear and fixed capital. Enterprises may retain the accrued basic depreciation to supplement the production development incentive fund or the dedicated enterprise fund. When transferring this depreciation to the funds, accountants shall debit the fixed asset depreciation account (basic depreciation) and credit the enterprise fund accounts (production development incentive fund or dedicated fund), while transferring money from the bank deposit account to another bank deposit account (bank deposit for enterprise funds or dedicated funds).

Article 39 - Bankruptcy. For fixed assets that have not yet been fully depreciated but are damaged (due to subjective faults of the enterprise), the enterprise must identify the cause and the person responsible for the material damage and proceed with liquidation procedures as stipulated in Circular No. 260-TTg of the Prime Minister. The undepreciated value (original cost minus accrued basic depreciation) must be fully paid into the state budget or refunded to the bank (if the fixed asset was constructed or purchased with bank loans) and recorded as loss. The monthly amount paid to the state budget (or refunded to the bank) and allocated to losses corresponds to the basic depreciation rate of the fixed asset when it was still usable. The undepreciated value shall be recorded in the fixed asset depreciation account (basic depreciation) and gradually paid into the state budget (or refunded to the bank) and recorded as loss according to accounting regulations. If the enterprise uses the production development incentive fund (the basic depreciation accrued from the fixed assets mentioned in Article 38) to pay into the state budget (or refund the bank) for the loss due to incomplete depreciation, accountants shall increase the fixed asset depreciation account, reduce the production development incentive fund, and simultaneously decrease the bank deposit for enterprise funds and decrease the fixed asset depreciation account.

Article 40 - For long-term leased fixed assets, the basic depreciation calculated and paid by the lessor according to general regulations shall be recorded as non-basic production and business costs (if the unit specializes in leasing fixed assets, it shall be recorded as basic business costs).

Major repair depreciation shall be handled as follows depending on the agreement between the two parties:

If the leasing enterprise is responsible for major repairs of the leased fixed assets, the leasing enterprise must calculate and accrue major repair depreciation and record it as non-basic production and business costs as per general regulations.

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

Article 41 - The actual basic depreciation amount deducted monthly (after deducting the basic depreciation amount to be paid to the Bank, to be submitted to superiors, or retained by the enterprise according to the prescribed regulations) must be promptly remitted to the state budget, regardless of the amount stipulated in the plan.

The monthly basic depreciation amount deducted from fixed assets constructed or purchased with borrowed funds from the Bank, including the interest on bank loans during the investment process mentioned in Article 23, the enterprise must promptly remit this amount to the Bank for repayment of principal and loan interest, or promptly remit it to the state budget if such fixed assets have fully repaid the loan principal but have not yet been fully depreciated.

For enterprises directly subordinate to associations of enterprises, if the annual financial plan specifies a portion of basic depreciation to be remitted to the association to form a centralized investment construction fund of the association, then each month, the enterprise must promptly deduct and remit that basic depreciation amount to the association's authority according to the level specified by the association.

In all cases of remitting basic depreciation as mentioned above, accounting entries must reduce the capital depreciation account (basic depreciation) and reduce the account of bank deposits regarding working capital. Specifically, for the case of remitting to the Bank to repay outstanding loan principal, there must also be reductions made in the long-term bank loan account and the account for loan repayment regarding basic construction investment according to the prescribed accounting procedures.

1. Local authorities shall assist and create favorable conditions for credit unions to operate safely and effectively. The entire actual large repair depreciation amount deducted monthly, the enterprise may retain for the purpose of large 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 process a request for the Bank to transfer the actual large repair depreciation amount deducted in the month from the working capital bank deposit account 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 deductions, the monthly wear and tear value is the basic depreciation amount of those fixed assets that must be deducted in the month. For fixed assets not subject to depreciation deductions, to determine the remaining value and ensure timely compensation through allocated funds, the monthly wear and tear value must also be determined based on the original cost of those fixed assets and the prescribed basic depreciation rate in the standard depreciation rates for fixed assets. The time for calculating wear and tear value or ceasing calculation of wear and tear value for fixed assets added or reduced within the year shall be carried out as stipulated for the calculation period of depreciation for added or reduced fixed assets as provided 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, changes in depreciation rates...) Based on data reflected on the fixed asset card (or book) (such as the original cost of fixed assets, month and year when fixed assets were put into use, basic depreciation standards...).

CHAPTER SIX
ACCOUNTING FOR MAINTENANCE OF FIXED ASSETS

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

Major maintenance of fixed assets refers to repair works with relatively long cycles, complex levels of repair, 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 periods of major maintenance.

Ministries and General Departments managing enterprises shall specify the specific contents of major maintenance and regular maintenance for each type of fixed asset based on the nature and characteristics of the maintenance work of 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 - Each year, enterprises must base their plans for major and regular maintenance of fixed assets for the entire 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 maintenance of fixed assets is decided by the enterprise director and approved by the superior supervisory authority, while the plan for regular maintenance of fixed assets is decided by the enterprise director.

Article 47 - Based on the approved maintenance plan, the mechanical and electrical engineering department (or corresponding functional departments) and the accounting department, together with relevant departments, prepare the budget for maintenance 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 (workshops, production units...), based on the content and volume of maintenance work, material consumption rates, labor wage rates for maintenance (or hourly rates when outsourcing).

The budget for major maintenance costs of fixed assets must be prepared for each major maintenance project of each type of fixed asset, 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 assets to be repaired.

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

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

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

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

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

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

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

- In the case where major repair work on fixed assets is carried out by auxiliary production units, auxiliary construction units, or by the main production workshops of the enterprise itself, all actual costs incurred during the repair process are aggregated into the accounts of auxiliary production, auxiliary construction, or main production. 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 bidding, 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 provisions of the contract:

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

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 the 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 to reduce the pre-deducted amount already included in the expenses of the 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 maintenance costs of fixed assets are included in monthly production costs or circulation costs.

In the case where regular maintenance is not evenly distributed between months, causing product costs or circulation costs to fluctuate irregularly, the enterprise may apply a method of pre-deducting a certain amount of regular maintenance 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 maintenance 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 maintenance costs of leased fixed assets is carried out in the same manner as the accounting for regular maintenance costs of the enterprise's own fixed assets.

Article 53- The enterprise accounting department must continuously monitor and inspect 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; timely settle accounts accurately and according to the designated capital sources 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 from the General Director to effectively utilize the existing major fixed asset repair funds.

Chapter VII
ACCOUNTING FOR THE REDUCTION OF FIXED ASSETS AND INTERNAL TRANSFERS OF FIXED ASSETS WITHIN THE ENTERPRISE

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 in enterprises 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 relevant authority.

Article 56- When conducting the liquidation of fixed assets, the enterprise must establish a liquidation committee. The composition of the liquidation committee is designated by the General Director but must necessarily include representatives from technical, accounting, and fixed asset management departments.

The liquidation committee must prepare a liquidation record according to the model prescribed by the State (initial recording system). The liquidation record is prepared 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 the 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 asset; if the liquidated fixed asset was constructed or purchased using 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 asset according to the prescribed regulations.

Article 58- Costs arising during the liquidation process of fixed assets are recorded as a reduction in working capital. In cases where the liquidation process spans multiple months, the liquidation costs are initially aggregated into the auxiliary production account (or auxiliary construction account). Upon completion of the liquidation process, all actual liquidation costs aggregated on the auxiliary production or construction account 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, 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, and reduces the fixed assets and fixed capital according to their original cost, while simultaneously reducing the depreciation value of the liquidated fixed assets.

Any surplus from the liquidation of fixed assets greater than the expenses is used to supplement the production development incentive fund; therefore, the accountant must record the transfer of this surplus 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.

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 the 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 handover record for the 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 handover record for fixed assets, the accountant records necessary information on the fixed asset card and ledger, files the fixed asset card in the corresponding file drawer in the card box, and reduces the fixed assets and fixed capital as specified in Article 59.

Article 61- All transactions related to the sale of fixed assets are recorded through the non-basic production and business account. On the debit side of this account, the amount payable to the state budget (or to be repaid to the bank) and the additional amount to be added to the production development incentive fund or special fund are recorded. On the credit side, the proceeds from the sale of fixed assets and the loss (if the proceeds from the sale of fixed assets are less than the amount payable to the state budget or to be repaid to the bank) are recorded. When paying the state budget (or repaying the bank) the proceeds from the sale of fixed assets, the accountant records a reduction in the budget settlement account (or long-term bank loan account) and a reduction in the current account at the bank under the working capital account according to the prescribed accounting procedures. On the budget settlement account, the payment to the state budget regarding the sale of fixed assets is recorded under the sub-account of other payments. When adding the difference between the proceeds from the sale of fixed assets and the amount payable to the state budget (or to be repaid to the bank) to the production development incentive fund or special fund, the accountant simultaneously records a transfer from the current account at the bank under the working capital account to another current account at the bank (current account for enterprise funds or special 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 handing over fixed assets as stipulated in Article 60. Based on the handover record for fixed assets, the accountant records necessary information on the fixed asset card and ledger, files the fixed asset card in the corresponding file drawer in the card box, and simultaneously records a reduction in fixed assets and fixed capital as specified 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 object 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 records a reduction in fixed assets and an increase in current assets (tools of labor belonging to current assets) at their original cost, while simultaneously recording a reduction in fixed capital and an increase in working capital at the remaining value of those fixed assets. The depreciation value of the fixed assets is transferred from the fixed asset depreciation account to the allocation account for tools of labor belonging to current assets.

Article 64- The transfer of fixed assets from one department to another within the enterprise must be authorized by the General Director's order. 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 General 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 document number and necessary contents on 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 mentioned in Articles 55, 60, 62, and 63 above lead to a decrease in the enterprise's fixed capital. Therefore, the enterprise accounting office must, through daily accounting records, strictly monitor the procedures for the exit of fixed assets as stipulated 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 General Director to make the most effective decision for each case presented.

Chapter VIII
INVENTORY OF FIXED ASSETS

Article 66- The inventory of fixed assets aims to accurately determine the existing fixed assets at the enterprise compared to the accounting records, the condition of preservation and use of fixed assets, and assess the actual capacity to enhance the responsibility of each individual and department in maintaining and using fixed assets efficiently.

Article 67- Fixed assets must be inventoried at least once a year before the end-of-year settlement report is prepared. Depending on specific conditions, 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 shall not 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, conducting the inventory appropriately before the last departure of the fixed assets from the enterprise in the year.

Article 68- The inventory of fixed assets must be conducted in accordance with the current state regulations on asset inventory. Prior to starting the inventory, the enterprise must review all files and documents of each fixed asset item (including leased and held-for-others fixed assets), verify the establishment and recording of fixed asset cards and consolidated accounting books. During the review, if any missing files, documents, or asset cards and ledgers are found, the enterprise must collect or establish them fully. Any errors in accounting records must be corrected promptly according to the 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 inventory report, identifying excesses and shortages, preparing files detailing the current status and causes of each excess or shortage case, and providing the basis for compiling the inventory result report and supplying documentation for handling excess or shortage cases according to the responsibilities and authorities of each level.

Article 71- The General Director of the enterprise is responsible for thoroughly studying and analyzing the inventory results and applying 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 ensuring 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 inventory results 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 accounting entries for fixed assets and fixed capital.

If the fixed assets not recorded in the books are currently in use, the basic depreciation and major repair depreciation must be calculated and included in production costs or circulation costs, and the depreciation value 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 simultaneously 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 make the book entries based on the disposal decision in accordance with general regulations.

CHAPTER IX

IMPLEMENTING PROVISIONS

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

Article 74- For enterprises owned collectively, the respective Ministries and General Departments in charge shall base this system to guide implementation appropriately in line with the business characteristics and management requirements of each type of enterprise.