Decision No. 51/TTg stipulates the basic depreciation regime for fixed assets in state-owned enterprises.

DECISION

REGULATIONS ON THE BASIC DEPRECIATION SYSTEM FOR FIXED ASSETS IN STATE ENTERPRISES

PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

To strengthen management of fixed assets under new conditions;

At the proposal of the Minister of Finance,

DECISION:

Article 1. In principle, all fixed assets in state enterprises must be fully utilized and depreciation must be accrued and sufficient capital recovered based on accurate and complete original cost calculations according to current regulations.

The State will conduct an assessment of fixed assets in state enterprises. The Ministry of Finance, in collaboration with the Government Price Board and the General Statistics Office, will study and submit to the Prime Minister for decision a plan for reassessing fixed assets.

During the period when the State has not organized the reassessment of fixed assets, state enterprises need to review the original cost of each fixed asset, develop appropriate adjustment plans in line with current prices, and submit them to the financial authority for consideration and decision.

Article 2. The level of basic depreciation for fixed assets in state enterprises shall be implemented according to the provisions of the State.

In 1995, the Ministry of Finance will study and amend the level of basic depreciation towards encouraging faster depreciation to allow enterprises to modernize and update technology.

Article 3. The increase or decrease in the level of basic depreciation shall be carried out as follows:

a) Enterprises are permitted to increase the level of basic depreciation in the following cases, provided that they do not incur losses:

- Fixed assets with rapid technological progress;

- Actual working conditions of fixed assets exceed normal levels;

- Enterprises borrow funds or raise capital through lawful means for investment where the repayment period or payment term is shorter than the depreciation period stipulated by the State.

Enterprises may decide to increase the level of basic depreciation up to 20% above the prescribed rate and report this to the financial authority for monitoring.

An increase exceeding 20% over the prescribed rate must be reviewed and decided upon by the financial authority.

b) For fixed assets previously invested in by the State which are now unsuitable for market mechanisms, have low utilization capacity, and if depreciated at the prescribed rate result in enterprise losses, the financial authority will consider and decide to reduce the level of basic depreciation on a case-by-case basis.

Article 4. Fixed assets that have been fully depreciated but are still usable do not require further basic depreciation, but must still be managed and used according to current regulations.

Article 5. All fixed asset basic depreciation from state capital is retained by the enterprise for investment, replacement, and modernization of fixed assets. Investment construction using retained basic depreciation funds shall be carried out in accordance with the Investment Management Regulations issued together with Decree No. 177-CP dated October 20, 1994 of the Government.

The management body of the enterprise decides on the mobilization of basic depreciation funds within the scope of economic and technical sectors for priority purposes on the principle of borrowing and repaying at reasonable interest rates.

Each year, the superior body of the enterprise must register the investment plan from retained basic depreciation funds with the State Planning Authority and the financial authority for procedural checks, investment targets, and monitoring of implementation.

Article 6. This Decision takes effect from January 1, 1995. Previous regulations contrary to this Decision are abolished; the Minister of Finance is responsible for guiding its implementation.

Article 7. The Minister, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairmen of People's Committees of provinces and centrally-administered cities are responsible for implementing this Decision./.