Decision No. 351/TC-QD-CĐKT on the issuance of regulations on the management, use, and depreciation of fixed assets in administrative and public service units.

Pursuant to …;

Regarding the issuance of regulations on the management, use, and depreciation of fixed assets in administrative and public service units
administrative and service units

THE MINISTER OF FINANCE

Pursuant to the State Budget Law promulgated by Decree No. 47/CTN dated April 3, 1996 of the President of the Socialist Republic of Vietnam and guiding documents for the State Budget Law;

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government stipulating tasks, powers, and responsibilities for state management by Ministries and ministerial-level agencies;

Pursuant to Decree No. 178/CP dated October 28, 1994 of the Government stipulating the tasks, powers, and organizational structure of the Ministry of Finance;

To ensure safe and effective management of state assets in the administrative and public service sector, improve the quality and effectiveness of management by administrative and public service units;

DECISION:

Article 1: The accompanying Decision hereby issues the "Regulations on Management, Use, and Depreciation of Fixed Assets in Administrative and Public Service Units."

These regulations apply to all administrative and public service units under Ministries, agencies at the level of ministries, government agencies, and provinces and centrally-administered cities, social organizations managed by central and local authorities, and armed forces operating with funds from the State Budget or other sources. Administrative and public service units that are members of enterprises (underholding corporations) if they operate with funds from the State Budget and use state-owned fixed assets are also subject to these regulations.

Article 2: This Decision takes effect from 1997. Previous regulations on the management, use, and depreciation of fixed assets in the administrative and public service sector that conflict with this Decision are abolished.

In implementing the regulations issued by this Decision, all fixed assets existing before January 1, 1997, units must: Base on accounting records and asset files to determine the original cost and remaining value of the fixed assets as the basis for compiling a new list of fixed assets, continue to monitor, manage, and use these fixed assets according to the original cost, remaining value, and accumulated depreciation as stipulated in these regulations. Fixed assets that do not meet the new standards will be transferred to monitoring and management as durable tools and equipment.

Article 3: Ministries, agencies at the level of ministries, government agencies, central social organizations, and social organizations are responsible for directing and implementing these regulations within their respective areas of management.

People's Committees of provinces and centrally-administered cities are responsible for directing and implementing these regulations in administrative and public service units within their jurisdictions.

Article 4: The Director of the State Asset Management Department, the Head of the Administrative and Public Service Affairs Department, the Head of the State Budget Department, the Head of the Accounting System Department, and the heads of units under and directly under the Ministry of Finance shall be responsible for organizing implementation, providing guidance, and supervising the enforcement of this Decision within their respective functions and authorities.

REGULATIONS

MANAGEMENT, USE, AND DEPRECIATION OF FIXED ASSETS
IN ADMINISTRATIVE AND PUBLIC SERVICE UNITS

(Issued together with Decision No.: 351-TC/QĐ/CĐKT,
dated May 22, 1997 of the Minister of Finance)

PART I
GENERAL PROVISIONS

1 - Scope of Application

Article 1: These regulations apply to all administrative and public service units (HCSN) under Ministries, agencies at the level of ministries, government agencies, and provinces and centrally-administered cities, social organizations managed by central and local authorities, and armed forces operating with funds from the State Budget or other sources.

Administrative and public service units that are member units of enterprises (underholding corporations) if they operate with funds from the State Budget (NSNN) and use state-owned fixed assets (TSCĐ) are mandatory subjects of these regulations.

2 - Implementation Provisions

Article 2: During their operations, administrative and public service units within the scope of application as stipulated in Article 1 must strictly comply with all provisions regarding the management, use, and depreciation of fixed assets as prescribed in these regulations.

Special fixed assets in the defense and security sectors will be regulated by the Ministry of Defense and the Ministry of Interior and can only be applied after obtaining written agreement from the Ministry of Finance.

Fixed assets of administrative and public service units used for production, business, service activities, non-profit activities (dedicated or combined use) or for lease (with permission from the financial authority) must be depreciated according to the "Regulations on Management, Use, and Depreciation of Fixed Assets" (Decision No. 1062-TC/QĐ/CSTC dated November 14, 1996 of the Minister of Finance) based on the degree of use.

PART II
REGULATIONS ON THE MANAGEMENT AND USE OF FIXED ASSETS

1 - Standards and Identification of Fixed Assets

Article 3: Standards and Identification of Tangible Fixed Assets

Tangible fixed assets are material assets with independent structures or systems consisting of multiple individual parts interconnected to perform specific functions (if any part is missing, the system cannot function), meeting both of the following criteria simultaneously:

A usage period of one year or more.

A value of 5,000,000 VND (five million dong) or more;

Article 4: In administrative and public service units, certain types of fixed assets are specified as follows:

1/ The following types of labor materials with a usage period of over one year but not meeting the value standard (less than five million dong) are still considered fixed assets, specifically including:

a - Machinery, equipment, office management facilities such as: Computer systems, peripheral devices of computers (stabilizers, power supplies, etc.), video players, telephones, research and study tools, laser printers or other printers (bought separately from computers), radio and television sets, refrigerators, typewriters (OPTINA, etc.), calculators (NISSA, etc.), safes, metal shelves for documents, measuring equipment (various scales: table scales, analytical balances, electronic scales, etc.), sofa sets with foam cushions, leather (or fabric) covers, etc.;

b - Transportation vehicles and travel means: Motorcycles (with a value less than 5 million dong) and other transportation and travel means;

c - High-quality wooden, rattan, bamboo, and plastic furniture: Desks, wardrobes, document cabinets, various bookshelves, stationery, etc.;

d - Working animals, animals for products, ornamental animals: Cattle, buffalo, horses, donkeys, elephants, police dogs, and wild animals kept in parks and zoos;

đ - Valuable books on specialized, scientific, historical topics, etc., in research institutes, libraries, museums, etc.;

e - Documents, maps, and other materials for investigation, survey, planning, measurement, and exploration of national resources must be stored and kept on behalf of the State.

g - Artworks, historical artifacts, commemorative items, etc., with high historical and artistic value.

h - Types of books and materials serving the specialized work of each unit.

i - Types of temporary houses made of bamboo, reed, palm leaves, such as classrooms in general education schools, working houses, etc. Architectural structures made of various materials, such as fences, drainage channels, retaining walls, courtyards, sidewalks, flower pots, etc.

2/ The following labor materials, although meeting the criteria of value (from five million dong or more), are easily damaged or broken and therefore are not considered fixed assets:

Glassware, porcelain items, etc. (except experimental and scientific research equipment)

Ministries, sectors, central-level social organizations, and provincial finance departments have the responsibility to specify the detailed list of special fixed assets and can only implement this when they receive written agreement from the Ministry of Finance (State Asset Management Department).

Article 5: The method for determining the object to be recorded for a type of specific fixed asset as a basis for monitoring, managing, and recording in the fixed asset accounting book:

For systems consisting of multiple individual property parts interconnected, where each component has a different usage period and independent operational functions, and requires separate management of each part, each part is considered an independent fixed asset recording object.

For working animals, ornamental animals, or animals producing products, each individual animal is considered a fixed asset recording object.

For perennial orchards, each orchard plot (or tree lot) is considered a fixed asset recording object.

Article 6: Fixed assets without price include special properties that cannot be valued but require strict physical management (such as antiques, ancient books, museum exhibits, mausoleums, etc.).

Central ministries, sectors, social organizations, and provincial finance departments are responsible for compiling lists of fixed assets without price and reporting them to the Ministry of Finance (State Asset Management Department).

Article 7: Criteria and identification of intangible fixed assets

Any actual expenses incurred by the unit related to its activities, if simultaneously satisfying both criteria of fixed assets without forming tangible fixed assets, are considered intangible fixed assets. If these expenses do not simultaneously meet both criteria, they are not recorded as increases in intangible fixed assets.

2 - Classification of fixed assets

Article 8: Fixed assets in public service units are mainly classified based on structure, aiming to determine the proportion of each type of fixed asset at each unit, while also serving as a basis for overall economic classification. Under this classification, fixed assets of public service units include the following types:

a/ Buildings and architectural structures, including:

Buildings: Working houses, theaters, museums, libraries, conference halls, clubs, cultural centers, sports arenas, research, experimental, and practical rooms, classrooms, kindergartens, medical examination and treatment houses, rest houses, nurseries, garages, machine and equipment storage houses, livestock sheds, etc.

Architectural structures: Including drilled wells, dug wells, playgrounds, drying yards, bridges, drainage systems, dikes, dams, roads (constructed by the unit), stadiums, swimming pools, shooting ranges, mausoleums, statues, surrounding walls, etc.

b/ Machinery and equipment: Various types of machinery and equipment used in the unit's professional work, such as machinery and equipment for cultural, information, propaganda services, research, experimental, practical work, medical examination and treatment, teaching, learning, exploration, surveying, production, business operations, and welfare needs of the unit.

c/ Transportation and transmission means: Means of transportation and transmission used for the unit's professional work (including motorcycles, bicycles, cars, trains, ships, ox carts, horse carriages, motorbikes, pipelines, and transmission equipment (information, water, electricity, etc.) and other unit activities (production, business, welfare).

d/ Management equipment: Equipment used in management and office work, such as computers, ceiling fans, desk fans, tables and chairs, measuring and quality inspection equipment, dehumidifiers, dust extractors, pest control equipment, etc.

đ/ Other fixed assets: Other types of fixed assets not covered in the above categories (mainly special fixed assets) such as artworks, scientific and technical journals in libraries, books and newspapers serving professional work, exhibits in museums, design samples provided by the unit to other units for rent; Living fixed assets such as perennial trees, working animals, ornamental animals, and animals producing products, garden plants, etc.

Article 9: Fixed assets of public service units are also classified based on their usage and utility to determine the actual status of fixed assets used for the unit's activities. Under this classification, fixed assets of the unit include the following types:

Fixed assets used for public service activities;

Fixed assets used for program, project, and topic activities;

Fixed assets specifically used for production, business, and service activities;

Fixed assets used for welfare purposes;

Fixed assets awaiting disposal (no longer needed or no longer usable);

3 - Principles and methods for determining the original cost of fixed assets

Article 10: In principle, the original cost of fixed assets is determined based on the actual formation cost of the fixed assets.

Article 11: Depending on different sources of formation, the original cost of tangible fixed assets is determined as follows:

a/ Purchased fixed assets:

The original cost of purchased fixed assets (including new and used purchases) includes: Actual purchase price (price on invoice) minus (-) discounts and purchase allowances (if any) and plus (+) transportation costs, loading and unloading fees, repair, renovation, upgrade costs before putting the fixed asset into use, installation and trial operation costs, taxes, and registration fees (if any).

b/ Constructed fixed assets:

The original value of fixed assets of the construction investment type (both self-made and outsourced) is the actual price of the construction project approved in the final settlement according to the current Investment Management Regulations, related costs, and stamp duty (if applicable).

For working animals, ornamental animals, and animals for products and perennial orchards, the original value is the total of all actual, reasonable, and legitimate expenses incurred from the formation until the utilization of such animals or orchards, in accordance with the current Investment Management Regulations, related costs, and stamp duty (if applicable).

c/ Fixed assets received through allocation or transfer.

The original value of fixed assets received through allocation or transfer... is the value recorded in the handover document (original value, remaining value) or the actual valuation by the handover committee, plus repair, renovation, and upgrade costs; transportation, unloading, installation, trial run costs, and stamp duty (if applicable) that the receiving party must bear before putting the fixed asset into use.

d/ Fixed assets received through sponsorship, aid, gifts, donations... is the value calculated by the financial authority for budget revenue and expenditure records or the actual valuation by the handover committee, plus repair, renovation, and upgrade costs; transportation, unloading, installation, trial run costs, and stamp duty (if applicable) that the receiving party must bear before putting them into use.

đ/ Special assets (priceless assets) are valued based on agreed prices for accounting purposes but not included in the total value of fixed assets of the entity. Agreed prices are determined based on market prices or values of similar assets.

Article 12: The original value of intangible fixed assets is determined specifically as follows:

Land: Is the total of all actual expenses directly related to the land being used.

Patents and inventions: The value of patents and inventions is determined by the costs incurred by the entity for research and production trials recognized by the state with patent certificates or the purchase of patent rights from domestic and foreign researchers.

Copyrights: Is the total amount paid as remuneration to the author and recognized by the state for the exclusive right to publish and sell the work.

Computer software costs: Are the amounts paid for programming services or purchasing computer software according to the programs of the entity (for entities using computers for record-keeping and management).

4 - Specific regulations on fixed asset management

Article 13: Every fixed asset in the public institution must have its own file (the file includes the handover document of fixed assets, contracts, invoices for purchasing fixed assets, and other relevant documents) and must be monitored, managed, utilized, and depreciated strictly in accordance with the provisions of this system. Fixed assets must be classified, statistically recorded, numbered, and detailedly tracked according to each object recorded as fixed assets and reflected in the fixed asset tracking book.

Fixed assets that have been fully depreciated but are still usable and participating in the activities of the entity shall not be removed from the fixed asset records and shall continue to be managed like other fixed assets.

Annually at the end of each fiscal year, or irregularly (cases of handover, division, merger, dissolution of the entity, or comprehensive inventory and revaluation of fixed assets according to the State's policy), the public institution must conduct an inventory of fixed assets. Any surplus or shortage of fixed assets discovered must be clearly recorded in the inventory document, with the cause identified, responsibility determined, measures proposed, and promptly recorded in the relevant accounting books according to the current public institution accounting regulations.

Article 14: All fixed assets in public institutions must be managed by physical items and their values (including special and priceless fixed assets), and regular and irregular reporting systems for fixed assets must be implemented as prescribed by the State. Fixed assets formed through aid, gifts, donations, or contributions must be appraised, their original values determined, and depreciation calculated similarly to those formed from state budget sources or with origins from the state budget.

For fixed assets requiring registration for use or circulation, when they are accepted for management and use, timely registration must be carried out. When they are no longer needed (liquidation, sale, transfer to another unit), the registration must be terminated or transferred immediately to the receiving unit. Fixed assets of agencies and units may not be used for personal purposes, leasing, production, business, or service without permission from the competent authority.

Article 15: The monitoring, management, utilization, and depreciation of fixed assets must follow the principle of valuing according to the original value, accumulated depreciation, and remaining value on the fixed asset accounting book.

Remaining value = Original value - Accumulated depreciation

of fixed assets fixed assets fixed assets

The original value of fixed assets in public institutions can only be changed in the following cases:

Revaluation of fixed asset value;

Renovation and upgrading of fixed assets increasing capacity or extending their lifespan;

Dismantling one or more parts of fixed assets;

Adding one or more parts to fixed assets.

When changing the original value of fixed assets, the entity must prepare a document detailing the grounds for change and recalculating the original value, remaining value, and accumulated depreciation of fixed assets on the accounting book, and proceed with accounting according to current regulations.

Article 16: The transfer, sale, or liquidation of fixed assets among public institutions must comply with the following regulations:

Only unused or unusable fixed assets can be transferred, sold, or liquidated upon decision by the competent authority in accordance with the current state management regulations for assets (Guidelines for accepting and transferring assets; Regulations on managing unused and unusable assets in public institutions).

When liquidating or selling unused and unusable fixed assets, public institutions must complete all necessary procedures, basing on the handover and liquidation documents, and related vouchers to reduce fixed assets according to the current public institution accounting regulations.

In all cases where fixed assets (TSCĐ) are lost or damaged due to subjective reasons of the manager or user, the unit must report clearly to the directly managing financial authority, the superior supervising agency, and must clearly identify the cause and strictly determine the material responsibility of the relevant collective and individual according to the current regulations of the State on the material responsibility system for employees regarding state property.

Article 17: Tools and equipment with a unit value of 500,000.00 dong or more and with a usage period exceeding one year but not classified as fixed assets shall be categorized under durable tools and equipment. The unit must closely monitor and manage each durable tool and equipment from the time it is put into use until it is reported as damaged (On Account 005 - Long-term tools and equipment in use and Property Record at the place of use).

CHAPTER III
PROVISIONS ON THE DEPRECIATION OF FIXED ASSETS

1- Provisions on the usage period and depreciation rate

Article 18: General mandatory provisions: In principle, the usage period of fixed assets is determined based on the following criteria:

Technical life of fixed assets as designed;

Condition of fixed assets (how long the fixed assets have been in use, generation of fixed assets, actual condition of the assets...);

Purpose and estimated efficiency of fixed assets.

Based on applying these criteria, the State mandates a unified framework for the usage period and depreciation rate for each type of fixed assets present in the unit (Annex 1 attached).

Article 19: Provisions applicable in special cases:

If the unit wishes to re-determine the usage period of fixed assets (different from the provisions in Annex 1: longer or shorter than the prescribed period), or wishes to determine the usage period of fixed assets not specified in Annex 1, the unit must prepare a record detailing the criteria used to determine the usage period of such fixed assets and submit it for review and decision by the directly managing financial authority.

In cases where factors affecting (such as renovation, upgrading, or dismantling parts of fixed assets...) extend or shorten the previously determined usage period of fixed assets, the unit must re-determine the usage period of fixed assets according to the above provisions at the completion of the related transactions. The unit must prepare a record detailing the basis for changing the usage period and the new usage period of fixed assets and register this with the directly managing financial authority.

Article 20: For intangible fixed assets, the usage period is determined by the unit itself but should not exceed 20 years and should not be less than 3 years.

2- Objects and scope of fixed assets subject to depreciation

Article 21: All fixed assets managed and used by the unit must be depreciated annually.

The following types of fixed assets do not require depreciation:

Special fixed assets (priceless assets);

Fixed assets temporarily leased by the unit for use;

Fixed assets kept in custody, held in trust, or stored for the State.

Article 22: Depreciation of fixed assets is calculated once a year in December.

Article 23: Fixed assets that have been fully depreciated but are still in use do not need further depreciation.

Article 24: Fixed assets that have not been fully depreciated but are damaged and cannot be used anymore do not need further depreciation.

3- Methods of calculating depreciation of fixed assets are stipulated as follows:

Article 25: The level of depreciation for each fixed asset within the aforementioned objects and scope is calculated using the following formula:

Annually, based on determining the increase and decrease in depreciation arising during the year, the unit calculates the total depreciation for that year according to the following formula:

Where:

Article 26: In cases where the usage period or original cost of fixed assets changes, the unit must recalculate the average annual depreciation amount of the fixed assets by dividing the remaining book value by the revised usage period or the remaining usage period (determined as the difference between the prescribed usage period minus the period already used) of the fixed assets.

Article 27: The depreciation amount for the final year of the usage period of fixed assets is determined as the difference between the original cost of the fixed assets and the cumulative depreciation already performed on the fixed assets.

Article 28: All fixed assets of administrative units mobilized for use in production and business activities, income-generating public services, or leasing activities must be depreciated.

In cases where the unit mobilizes fixed assets from administrative funds for use in these activities, the depreciation amount of fixed assets is calculated and allocated based on the ratio of the quantity of time, number of uses, or volume of work completed within a given period of the fixed assets. Depreciation of fixed assets is recorded as part of production and business costs or income-generating public service expenses for the period.

The depreciation amount of fixed assets formed from budget funds allocated to the unit must be remitted to the State Budget according to the current financial management regulations. The depreciation amount of fixed assets formed from other sources (raised, borrowed, etc.) can be used by the unit for the renewal, replacement, or modernization of fixed assets or to repay loans.

ANNEX 1

FRAMEWORK FOR USAGE PERIOD AND DEPRECIATION RATE
TYPES OF FIXED ASSETS

(Issued together with Decision No.: 351 - TC/QĐ/CĐKT, dated May 22, 1997, by the Minister of Finance)

ANNEX 1

EXAMPLES OF FIXED ASSET DEPRECIATION CALCULATION

(Issued together with Decision No.: 351 - TC/QĐ/CĐKT, dated May 22, 1997, by the Minister of Finance)

Example: Unit A purchases a fixed asset (new at 100%) with an invoice price of 10,000,000 VND, purchase discount of 1,000,000 VND, transportation cost of 300,000 VND, installation and trial operation costs until it is put into use amounting to 2,000,000 VND. The useful life of the fixed asset is 10 years (in accordance with Appendix 1), and the asset was put into use on January 1, 1997.

Original cost of the fixed asset = 10,000,000 VND - 1,000,000 VND + 300,000 VND + 2,000,000 VND = 11,300,000 VND

Annual average depreciation rate = 11,300,000 VND x 10% = 1,130,000 VND/year

Each year, the unit records depreciation of 1,130,000 VND, reducing the formation cost of the fixed asset.

In the fifth year of use, the unit upgrades the fixed asset with total costs of 5,000,000 VND, the useful life is reassessed at 7 years (increased by 2 years compared to the initial registration period), completion and commissioning date is January 1, 2002.

Original cost of the fixed asset = 11,300,000 VND + 5,000,000 VND = 16,300,000 VND

Accumulated depreciation already calculated = 1,130,000 VND x 5 years = 5,650,000 VND

Remaining value on accounting books = 16,300,000 VND - 5,650,000 VND = 10,650,000 VND

Annual depreciation rate = 10,650,000 VND ÷ 7 years = 1,521,000 VND

From 2002 onwards, the unit calculates annual depreciation of 1,521,000 VND for the upgraded fixed asset (In the final year, full remaining value will be depreciated)./