Circular No. 73/2022/TT-BTC on the management regime, depreciation calculation, and provision for amortization of water supply infrastructure assets

CIRCULAR
Regulations on management, depreciation calculation, and depreciation accrual for water supply infrastructure assets

infrastructure for clean water supply

                              

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

Pursuant to Decree No. 43/2022/NĐ-CP dated June 24, 2022 of the Government on the management, use, and exploitation of water supply infrastructure assets;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the State Asset Management Agency,

The Minister of Finance issues this Circular stipulating the management regime, depreciation calculation, and depreciation accrual for water supply infrastructure assets.

PART I

SCOPE OF REGULATION, APPLICABLE OBJECTS

Article 1. Scope of Regulation

Article 1. This Circular stipulates the management regime, depreciation calculation, and depreciation accrual for water supply infrastructure assets, which are fixed assets (hereinafter referred to as water supply infrastructure assets) invested in and managed by the State and transferred to state agencies and public service units for management in accordance with Decree No. 43/2022/NĐ-CP dated June 24, 2022 of the Government on the management, use, and exploitation of water supply infrastructure assets (hereinafter referred to as Decree No. 43/2022/NĐ-CP), including:

a) Centralized rural water supply infrastructure assets.

b) Urban water supply infrastructure assets.

Article 2. For water supply infrastructure assets managed by enterprises under the form of state capital participation in enterprises, the management and depreciation accrual shall be carried out in accordance with the legal provisions on the management, use, and depreciation accrual for fixed assets applicable to enterprises; such cases are not within the scope of adjustment of this Circular.

Article 2. Applicability

The management regime, depreciation calculation, and depreciation accrual for water supply infrastructure assets stipulated in this Circular apply to agencies and units entrusted with the management of water supply infrastructure assets, including:

1. Public service units with the function of providing clean water that are entrusted with the management of water supply infrastructure assets.

2. People's Committees of communes, wards, towns (hereinafter referred to as People's Committees at the commune level) entrusted with the management of water supply infrastructure assets.

3. Specialized agencies responsible for water supply entrusted with the management of water supply infrastructure assets.

Chapter II

GENERAL PROVISIONS ON THE MANAGEMENT OF WATER SUPPLY INFRASTRUCTURE ASSETS

Article 3. Criteria for identifying water supply infrastructure assets

1. Water supply infrastructure assets are a complete centralized water supply system or independent assets satisfying simultaneously both of the following criteria are considered fixed assets:

a) Having a usage period of one year or more.

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

2. In cases where a water supply infrastructure asset system is entrusted to multiple agencies and units for management, the portion of the asset entrusted to each agency or unit satisfying simultaneously both criteria specified in point a and point b of Clause 1 of this Article is considered a fixed asset.

If necessary, the People's Committee at the provincial level may delegate authority to specialized agencies on water supply and People's Committees at the district level to decide on the accounting record of water supply infrastructure assets being conducted either as a complete centralized water supply system or as individual assets for agencies and units entrusted with the management of water supply infrastructure assets to implement accounting records.

Article 4. Principles for Managing Water Supply Infrastructure Assets

1. Water supply infrastructure assets as stipulated in Article 3 of this Circular must be documented in asset records to manage them strictly regarding both physical items and value in accordance with laws on managing and using state assets and related laws.

2. Each water supply infrastructure asset as stipulated in Article 3 of this Circular shall be a separate accounting object. Accounting for water supply infrastructure assets must fully reflect and record information about original cost, remaining value, depreciation/amortization of the asset.

3. Agencies and units entrusted with managing water supply infrastructure assets shall have the responsibility to:

a) Establish asset cards and account for all water supply infrastructure assets under their management according to the current accounting regulations.

b) Conduct annual asset inventory; adjust accounting figures if discrepancies arise during the inventory process.

c) Report declarations and management and usage situations of water supply infrastructure assets as prescribed in Articles 24 and 25 of Decree No. 43/2022/NĐ-CP and relevant laws.

4. For water supply infrastructure assets that are no longer needed but have not yet been fully depreciated or amortized according to regulations, agencies and units entrusted with managing these assets shall continue to manage, monitor, and preserve them in accordance with current regulations and calculate depreciation as prescribed in this Circular until they are disposed of according to regulations.

5. For water supply infrastructure assets that have been fully depreciated or amortized but are still in use, agencies and units entrusted with managing these assets shall continue to manage, use, monitor, and preserve them in accordance with current regulations without having to calculate further depreciation or amortization.

In cases where water supply infrastructure assets have been fully depreciated or amortized but subsequently require a change in original cost as stipulated in Clause 7, Article 5 of this Circular, depreciation and amortization must be calculated according to regulations for the remaining period of use (if any) following the change in original cost.

6. When leasing the right to exploit water supply infrastructure assets, agencies and units entrusted with managing these assets shall continue to manage, monitor, and calculate depreciation of the assets according to this Circular during the lease period.

7. When transferring the right to exploit water supply infrastructure assets for a limited time, during the transfer period, agencies and units entrusted with managing these assets (the transferring party):

a) Shall be responsible for monitoring and supervising the performance of obligations by the transferee in accordance with the law and the limited-term exploitation rights transfer contract.

b) Shall not calculate depreciation or amortization as prescribed in this Circular and shall not account for the asset but shall monitor it through financial notes according to current accounting regulations.

c) Upon expiration of the limited-term exploitation rights transfer period for water supply infrastructure assets, the agency or unit entrusted with managing the asset shall take back the asset according to the limited-term exploitation rights transfer contract and relevant laws, re-determine the original cost and remaining value of the asset to manage, use, calculate depreciation, and amortize according to Decree No. 43/2022/NĐ-CP and this Circular.

Chapter III
ORIGINAL COST, DEPRECIATION, AMORTIZATION, REMAINING VALUE
OF WATER SUPPLY INFRASTRUCTURE ASSETS

Article 5. Determination of the Original Cost of Water Supply Infrastructure Assets

1. The original cost of water supply infrastructure assets that were put into use before the effective date of Decree No. 43/2022/NĐ-CP shall be determined as follows:

a) For water supply infrastructure assets currently being monitored and recorded in accounting books, the original cost of the asset is the original cost being monitored and recorded in the accounting books.

b) For water supply infrastructure assets not yet being monitored and recorded in accounting books:

b1) In cases where water supply infrastructure assets not yet being monitored and recorded in accounting books have purchase price documentation or construction cost documentation, the purchase price or construction cost according to such documentation shall be used to determine the original cost of the asset.

b2) Where the accounting books of the agency or unit entrusted with managing the water supply infrastructure assets or another agency or unit entrusted with managing the water supply infrastructure assets within the scope of one (01) province or centrally-administered city record information on the original cost of water supply infrastructure assets of equivalent grade, scale, and capacity and with corresponding usage time (put into use in the same year), the original cost of water supply infrastructure assets of equivalent grade, scale, capacity, and usage time shall be used to determine the original cost of the asset.

b3) In cases where there is no information on the original cost of water supply infrastructure assets as stipulated in points b1 and b2 of this clause but there is evidence to determine the time of putting the asset into use, the new purchase price or new construction cost of the asset at the time of putting it into use, the original cost of the asset shall be determined as follows:

The new purchase price of similar assets or the new construction cost of assets with equivalent technical standards at the time of putting the asset into use

Original cost of water supply infrastructure assets

Where:

The new purchase price of similar assets applies to assets that are not buildings, construction works, or architectural structures, which is the price of new similar assets sold on the market at the time of putting the asset into use.

The new construction cost of assets with equivalent technical standards applies to assets that are buildings, construction works, or architectural structures (including buildings, construction works, or architectural structures formed through procurement) and is determined as follows:

For water supply infrastructure assets that are complete centralized water supply systems (including buildings, construction works, architectural structures, machinery, and equipment), the original cost of the asset equals the total original cost of buildings, construction works, architectural structures, and machinery and equipment determined according to this provision.

b4) In cases where there is no basis for determining the original cost of water supply infrastructure assets as stipulated in points b1, b2, and b3 of this clause, the agency or unit entrusted with managing the water supply infrastructure assets shall hire an organization with the necessary conditions for conducting valuation appraisals to re-evaluate the remaining value and depreciation/amortization period of the asset in accordance with the provisions of Article 8 of this Circular. The original cost of water supply infrastructure assets in this case shall be determined as follows:

2. The original cost of water supply infrastructure assets formed from procurement and put into use from the effective date of Decree No. 43/2022/NĐ-CP shall be determined as follows:

Where:

- The new purchase price of similar assets applicable to assets that are not buildings, construction works, or architectural structures, which is the price of new similar assets sold on the market at the time of putting the asset into use.

- The new construction cost of assets with equivalent technical standards applicable to assets that are buildings, construction works, or architectural structures (including buildings, construction works, or architectural structures formed through procurement) is determined as follows:

For water supply infrastructure assets that are complete centralized water supply systems (including buildings, construction works, architectural structures, machinery, and equipment), the original cost of the asset equals the total original cost of buildings, construction works, architectural structures, and machinery and equipment determined according to this provision.

a) Trade discounts, price reductions, or seller penalties (if any) deducted from the invoice value may only be applied if the invoice value includes these trade discounts, price reductions, or seller penalties.

b) Other costs (if any) are reasonable costs directly related to the procurement of water supply infrastructure assets that the agency or unit has incurred up to the time of putting the asset into use. In cases where common costs arise for multiple water supply infrastructure assets, the costs shall be allocated to each water supply infrastructure asset based on appropriate criteria (such as area, volume of construction, quantity, invoice value of water supply infrastructure assets generating common costs...).

3. The original cost of water supply infrastructure assets formed from investment construction and put into use from the effective date of Decree No. 43/2022/NĐ-CP is the final settlement value approved by the competent authority in accordance with the laws on investment and construction. Some special cases are provided as follows:

a) In case the water supply infrastructure assets have been put into use (after completion of investment construction) but have not yet been settled and approved by the competent authority, the entity assigned to manage the water supply infrastructure assets shall record the asset in the accounting books from the date of acceptance and handover for use. The recorded cost shall be a provisional cost. In this case, the provisional cost shall be selected in the following order of priority:

The proposed settlement value.

The value determined in the Acceptance Certificate A-B.

The total investment amount or approved project estimate, or the most recently adjusted project estimate (in cases where the project estimate has been adjusted).

When the settlement is approved by the competent authority, the entity assigned to manage the water supply infrastructure assets shall adjust the provisional cost recorded in the accounting books according to the approved settlement value to adjust the accounting records and account for the asset in accordance with regulations.

b) In cases where the project includes multiple components or assets (multiple asset recording objects) but does not have separate estimates or settlements for each component or asset, the approved settlement value shall be allocated to each component or asset based on appropriate criteria (such as area, volume of construction, quantity of details of each asset or component...).

In cases where the project includes multiple components or assets (multiple asset recording objects) with separate estimates but without separate settlements for each component or asset, the approved settlement value shall be allocated to each component or asset based on appropriate criteria (such as area, volume of construction, quantity, detailed budgeted value of each asset or component...).

For projects including multiple components or assets (multiple asset recording objects) that are invested in and accepted separately for each component or asset, once a component or asset has completed its construction investment and acceptance for use, it shall be recorded in the accounting books from the date of handover for use.

d) In cases where the project settlement value must be adjusted according to the recommendations or conclusions of the competent authority after inspection or audit, the entity assigned to manage the water supply infrastructure assets must adjust the original cost according to the recommendations or conclusions of the competent authority.

4. The original cost of water supply infrastructure assets received through assignment or transfer from the effective date of Decree No. 43/2022/NĐ-CP shall be determined as follows:

Where:

a) The original cost recorded on the Asset Transfer and Acceptance Certificate shall be determined as follows:

al) For assets that have been tracked and recorded in the accounting books, the original cost recorded on the Asset Transfer and Acceptance Certificate is the original cost of the water supply infrastructure assets already tracked and recorded in the accounting books of the entity transferring or reallocating the assets.

In cases where the assets have not been tracked or recorded in the accounting books, the entity assigned to manage the water supply infrastructure assets shall be responsible for re-evaluating the asset value according to points a2, a3, and a4 of this clause before submitting to the competent authority for decision on asset assignment or reallocation.

a2) For water supply infrastructure assets that have not been tracked or recorded in the accounting books but have documentation determining the purchase price or construction cost of the asset, the original cost recorded on the Asset Transfer and Acceptance Certificate shall be determined according to the provisions of clauses 2 and 3 of this Article.

a3) For water supply infrastructure assets that have not been tracked or recorded in the accounting books and do not have documentation to determine the purchase price or construction cost as stipulated in point a2 of this clause but have evidence to determine the time of putting the asset into use and the new purchase price or new construction cost at the time of use, the original cost recorded on the Asset Transfer and Acceptance Certificate shall be determined as follows:

The new purchase price of similar assets or the new construction cost of assets with equivalent technical standards at the time of putting the asset into use

The original cost recorded on the Asset Transfer and Acceptance Certificate

Where:

The new purchase price of similar assets applies to assets that are not buildings, construction works, or architectural structures, which is the price of new similar assets sold on the market at the time of putting the asset into use.

The new construction cost of assets with equivalent technical standards applies to assets that are buildings, construction works, or architectural structures (including buildings, construction works, or architectural structures formed through procurement) and is determined as follows:

New - specific regulations of the locality where the asset is located (asset) applicable at the time of handover and putting the asset into use

For water supply infrastructure assets that form a complete centralized water supply system (including buildings, construction works, structures, machinery, and equipment), the original cost recorded on the Asset Transfer and Acceptance Certificate shall be the total original cost of buildings, construction works, structures, and machinery and equipment determined according to the provisions of this point.

a4) In cases where there is no basis to determine the original cost of water supply infrastructure assets according to points a1, a2, and a3 of this clause, the entity assigned to manage the water supply infrastructure assets shall hire an organization with the necessary conditions to conduct a valuation to re-evaluate the remaining value and the remaining depreciation/amortization period of the asset in accordance with the provisions of Article 8 of this Circular to record in the Asset Transfer and Acceptance Certificate. The original cost of water supply infrastructure assets in this case shall be determined as follows:

b) Other costs (if any) are reasonable expenses directly related to the acceptance of assigned clean water infrastructure assets, which have been incurred by the entity receiving such assets up to the time of asset utilization. In cases where common costs arise for multiple clean water infrastructure assets, the entity shall allocate such costs to each individual asset based on appropriate criteria (such as area, construction volume, quantity, value of assets incurring common costs...).

5. The original cost of clean water infrastructure assets discovered in excess during inventory shall be determined as follows:

Where:

a) The original cost recorded in the Inventory Report shall be determined as follows:

a1) For clean water infrastructure assets with documentation to determine purchase price or construction cost, the original cost recorded in the Inventory Report shall be determined according to the provisions of Clause 2 and Clause 3 of this Article.

a2) For clean water infrastructure assets without documentation to determine purchase price or construction cost as stipulated in point a1 of this clause but with evidence to determine the time of asset utilization, new purchase price or new construction cost at the time of utilization, the original cost to be recorded in the Inventory Report shall be determined as follows:

Where:

The new purchase price of similar assets applies to assets that are not buildings, construction works, or architectural structures, which is the price of new similar assets sold on the market at the time of putting the asset into use.

The new construction cost of assets with equivalent technical standards applies to assets that are buildings, construction works, or architectural structures (including buildings, construction works, or architectural structures formed through procurement) and is determined as follows:

For clean water infrastructure assets that are complete centralized water supply systems (including buildings, construction works, architectural structures, machinery, and equipment), the original cost recorded in the Inventory Report shall be the total original cost of buildings, construction works, architectural structures, and machinery and equipment determined according to the provisions of this point.

a3) In cases where there is no basis to determine the original cost of clean water infrastructure assets as stipulated in points a1 and a2 of this clause, the entity managing such assets shall engage an organization with the necessary conditions to conduct valuation to reassess the remaining value and the remaining depreciation/amortization period of the asset in accordance with the provisions of Article 8 of this Circular to record in the asset inventory report. The original cost of clean water infrastructure assets in this case shall be determined as follows:

b) Other costs (if any) are reasonable expenses incurred by the entity during the inventory process (including costs for engaging an organization with valuation functions as stipulated in point a3 of this clause) to determine the original cost and remaining value of clean water infrastructure assets for accounting records. In cases where common costs arise for multiple clean water infrastructure assets, the entity shall allocate such costs to each individual asset based on appropriate criteria (such as area, construction volume, quantity, value of assets incurring common costs...).

6. For clean water infrastructure assets received back by the entity after the expiration of the limited exploitation rights transfer period as stipulated in point c of Clause 7 of Article 4 of this Circular, the original cost of the clean water infrastructure assets shall be re-determined as equal to the original cost recorded at the time of transfer under the Limited Exploitation Rights Transfer Contract plus the investment value, upgrade, and expansion costs approved by the competent authority.

7. Changes to the original cost of clean water infrastructure assets

The original cost of clean water infrastructure assets may be changed in the following cases:

a) Revaluation of asset value when conducting inventory as decided by the Prime Minister.

b) Implementation of upgrades and expansions of assets according to projects approved by competent state agencies.

c) Removal of one or more parts of clean water infrastructure assets (in cases where the value of removed parts is included in the original cost of clean water infrastructure assets).

d) Installation of one or more parts of clean water infrastructure assets.

đ) Loss of part or severe damage due to natural disasters, force majeure, or other sudden impacts (except in cases where the asset has been restored through public asset insurance).

Article 6. Determination of the Original Cost of Water Supply Infrastructure Assets in Cases of Changes to the Original Cost of Assets

When changes to the original cost of water supply infrastructure assets occur in the cases specified in Clause 7, Article 5 of this Circular, the agency or unit entrusted with managing the water supply infrastructure assets shall prepare a Record detailing the reasons (cases) for the change in original cost; simultaneously, they shall re-determine the original cost index of the water supply infrastructure assets as the basis for determining the depreciation rate, amortization amount, residual value of the asset to adjust the accounting records and implement management, depreciation calculation, and amortization extraction according to the provisions of this Circular.

The re-determination of the original cost of water supply infrastructure assets in cases of changes to the original cost as stipulated in Clause 7, Article 5 of this Circular shall be carried out as follows:

1. In the case specified in Point a, Clause 7, Article 5 of this Circular, the original cost of the water supply infrastructure assets shall be re-determined according to the guidance of the competent authority on inventory and revaluation of assets.

2. In the case specified in Point b, Clause 7, Article 5 of this Circular, the original cost of the water supply infrastructure assets shall be re-determined by adding the additional value due to upgrading or expanding the water supply infrastructure assets to the current book value. The additional value due to upgrading or expanding the water supply infrastructure assets is the final settlement value approved by the competent authority.

3. In the case of dismantling one or more parts of the water supply infrastructure assets as specified in Point c, Clause 7, Article 5 of this Circular, the original cost of the water supply infrastructure assets shall be re-determined by subtracting the value of the dismantled part from the current book value and adding reasonable costs directly related to the dismantling process that have been identified by the agency or unit entrusted with managing the water supply infrastructure assets up to the completion of the dismantling work.

The value of the dismantled part of the water supply infrastructure assets shall be determined as follows:

a) If there is documentation specifying the purchase price, final settlement value/estimated value of the dismantled part of the water supply infrastructure assets, then the value of the dismantled part shall be determined based on the purchase price, final settlement value/estimated value of the dismantled part.

b) If there is no documentation as specified in Point a of this clause but the original cost of the water supply infrastructure assets can be allocated to the dismantled part according to appropriate criteria (such as area, volume of construction, quantity, purchase price, estimated value...), then the value of the dismantled part of the water supply infrastructure assets shall be determined based on the allocated value.

c) If there is no documentation as specified in Point a of this clause and the original cost of the water supply infrastructure assets cannot be allocated to the dismantled part, then the value of the dismantled part of the water supply infrastructure assets shall be determined as the new market purchase price of the dismantled part of the water supply infrastructure assets at the time of asset commissioning.

If the new market purchase price of the dismantled part of the water supply infrastructure assets at the time of asset commissioning cannot be determined, the agency or unit entrusted with managing the water supply infrastructure assets shall hire an organization with the necessary conditions to conduct valuation to determine the value of the dismantled part of the water supply infrastructure assets as the basis for determining the original cost of the asset after dismantling.

4. In the case of installing one or more parts of the water supply infrastructure assets as specified in Point d, Clause 7, Article 5 of this Circular, the original cost of the water supply infrastructure assets shall be re-determined by adding the increased value due to the installation of one or more parts of the water supply infrastructure assets to the current book value and adding reasonable costs directly related to the installation process that have been identified by the agency or unit entrusted with managing the water supply infrastructure assets up to the completion of the installation work.

The increased value due to the installation of one or more parts of the water supply infrastructure assets is the corresponding value of the installed part determined according to the cases specified in Article 5 of this Circular.

5. In the case specified in Point e, Clause 7, Article 5 of this Circular, the agency or unit entrusted with managing the water supply infrastructure assets shall hire an organization with the necessary conditions to conduct valuation to reassess the remaining value, remaining depreciation/amortization period of the asset consistent with the provisions of Article 8 of this Circular for damaged assets to record in the Record of Change in Original Cost. The original cost of the water supply infrastructure assets in this case shall be determined as follows:

Article 7. Principles for Calculating Depreciation and Amortization of Water Supply Infrastructure Assets

1. Water supply infrastructure assets as defined in Article 3 of this Circular shall be subject to depreciation and amortization according to the provisions of this Circular, except for cases specified in Clause 2 of this Article.

2. Agencies and units entrusted with managing water supply infrastructure assets are not required to calculate depreciation and amortization for:

a) Assets that have not yet been fully depreciated or amortized but are damaged beyond repair.

b) Assets that have been fully depreciated or amortized but are still usable.

c) Water supply infrastructure assets during the period of transfer with a limited exploitation right.

3. The calculation of depreciation and amortization of water supply infrastructure assets

a) Shall be based on the following criteria:

a1) Type of asset (Complete centralized water supply system/individual assets),

a2) Period for calculating depreciation and amortization of water supply infrastructure assets.

a3) Rate of depreciation and amortization.

a4) Accounting records in accordance with current accounting regulations.

b) Centralized rural water supply infrastructure assets must be fully amortized. In cases where full amortization affects the regulated price of domestic water supply, based on the actual situation of each period, reports from agencies and units entrusted with managing water supply infrastructure assets, and opinions from financial authorities at the same level and specialized agencies on water supply, the People's Committee of the province shall consider and decide:

b1) To fully calculate depreciation without amortization.

b2) To both calculate depreciation and amortize, and specify the percentage (%) allocation for depreciation/amortization for each asset.

c) Urban water supply infrastructure assets must be fully amortized without calculating depreciation.

4. The calculation of depreciation and amortization of water supply infrastructure assets shall be carried out as follows:

a) For centralized rural water supply infrastructure assets that are fully depreciated, the depreciation calculation shall be conducted once a year in December, before closing the accounting books. If the asset has been in use for six months or more, it will be calculated for a full year; if less than six months, no depreciation will be calculated for that year.

b) For water supply infrastructure assets that are fully amortized, the amortization shall be conducted monthly.

c) For centralized rural water supply infrastructure assets that both calculate depreciation and amortize, the depreciation and amortization shall be conducted monthly.

Article 8. List of Assets, Time Frame for Calculating Depreciation and Amortization, and Depreciation and Amortization Rates

1. For centralized rural water supply infrastructure assets:

a) In cases where the accounting record object is a complete centralized water supply system:

b) In cases where the accounting record object is individual assets:

Based on the scale of the project, water supply and treatment technology, pipeline materials, economic and social characteristics of each locality; based on the time frame for calculating depreciation/amortization and the framework for depreciation/amortization rates stipulated in points a and b of this clause; based on the proposals of agencies and units entrusted with managing water supply infrastructure assets and their superior management agencies (if any), specialized agencies on water supply shall take the lead in coordinating with the Department of Finance to report to the People's Committee of the province to decide the specific time frame for calculating depreciation/amortization and depreciation/amortization rates for each system and individual asset (each accounting record object), ensuring alignment with the approved schedule for adjusting clean water prices by competent authorities.

In necessary cases, the People's Committee of the province may delegate specialized agencies on water supply to decide the specific time frame for calculating depreciation/amortization and depreciation/amortization rates for each system and individual asset (each accounting record object), ensuring alignment with the approved schedule for adjusting clean water prices by competent authorities.

2. For urban water supply infrastructure assets:

a) In cases where the accounting record object is a complete centralized water supply system:

b) In cases where the accounting record object is individual assets:

c) Based on the scale of the project, water supply and treatment technology, pipeline materials, economic and social characteristics of each locality; based on the time frame for amortization and the framework for amortization rates stipulated in points a and b of this clause; based on the proposals of agencies and units entrusted with managing water supply infrastructure assets and their superior management agencies (if any), specialized agencies on water supply shall take the lead in coordinating with the Department of Finance to report to the People's Committee of the province to decide the specific time frame for amortization and amortization rates for each system and individual asset (each accounting record object), ensuring alignment with the approved schedule for adjusting clean water prices by competent authorities.

In necessary cases, the People's Committee of the province may delegate specialized agencies on water supply to decide the specific time frame for amortization and amortization rates for each system and individual asset (each accounting record object), ensuring alignment with the approved schedule for adjusting clean water prices by competent authorities,

d) For urban water supply infrastructure assets, in cases where it is necessary to apply a different depreciation method from that stipulated in this Circular, the People's Committee of the province shall consider and decide on the depreciation method appropriate to the actual situation of the locality and the price adjustment schedule for clean water approved by the competent authority in accordance with the regulations.

Article 9. Method of Calculating Depreciation and Amortization

1. Depreciation and amortization period:

a) For water supply infrastructure assets subject to full depreciation, the annual depreciation rate of each water supply infrastructure asset shall be calculated according to the formula:

Where:

- The original cost of the water supply infrastructure asset shall be determined in accordance with Article 5 and Article 6 of this Circular.

- The depreciation rate shall be determined in accordance with Article 8 of this Circular.

b) For water supply infrastructure assets subject to full amortization, the monthly amortization rate of each water supply infrastructure asset shall be calculated according to the formula:

Where:

- The original cost of the asset is

---

determined in accordance with Article 5 and Article 6 of this Circular.

- The amortization rate is determined in accordance with Article 8 of this Circular.

c) For rural centralized water supply infrastructure assets subject to both depreciation and amortization, the monthly depreciation and amortization rates of each water supply infrastructure asset shall be calculated according to the following formulas:

Where:

- The original cost of the asset shall be determined in accordance with Article 5 and Article 6 of this Circular.

- The depreciation/amortization rate is determined in accordance with Article 8 of this Circular.

- The percentage allocation of the depreciation/amortization calculation rate is determined in accordance with point b2 clause 3 of Article 7 of this Circular.

2. Accumulated depreciation, accumulated amortization:

a) For water supply infrastructure assets subject to full depreciation, the accumulated depreciation up to year (n) shall be calculated according to the formula:

b) For water supply infrastructure assets subject to full amortization, the accumulated amortization up to the accounting period (t) shall be calculated according to the formula:

c) For rural centralized water supply infrastructure assets subject to both depreciation and amortization, the accumulated depreciation and accumulated amortization up to the accounting period (t) shall be calculated according to the formula:

3. Depreciation/amortization calculation rate for the final year/final accounting period of the asset's useful life:

a) For water supply infrastructure assets subject to full depreciation, the depreciation calculation rate for the final year of the asset's useful life shall be calculated according to the formula:

b) For water supply infrastructure assets subject to full amortization, the amortization calculation rate for the final accounting period of the asset's useful life shall be calculated according to the formula:

c) For rural centralized water supply infrastructure assets subject to both depreciation and amortization, the depreciation/amortization calculation rate for the final accounting period of the asset's useful life shall be calculated according to the formula:

Article 10. Remaining value of water supply infrastructure assets

Clause 1. The remaining value of water supply infrastructure assets subject to full depreciation is calculated according to the formula:

Clause 2. The remaining value of water supply infrastructure assets subject to full depreciation deduction is calculated according to the formula:

Clause 3. The remaining value of rural centralized water supply infrastructure assets subject to both depreciation and depreciation deduction is calculated according to the formula:

Chapter VI

IMPLEMENTING PROVISIONS

Article 11. Transitional Provisions

Clause 1. For rural centralized water supply infrastructure assets

Point a. In cases where rural centralized water supply infrastructure assets have been subject to depreciation deductions in accordance with Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance on management, use, and operation of centralized rural water supply works, and Circular No. 76/2017/TT-BTC dated July 26, 2017 of the Ministry of Finance amending and supplementing certain provisions of Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance, from the fiscal year 2023, the calculation of depreciation and depreciation deduction for such assets shall be carried out in accordance with this Circular.

Point b. In cases where rural centralized water supply infrastructure assets have not been subject to depreciation deductions in accordance with Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance on management, use, and operation of centralized rural water supply works, and Circular No. 76/2017/TT-BTC dated July 26, 2017 of the Ministry of Finance amending and supplementing certain provisions of Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance, the agency or unit entrusted with managing such water supply infrastructure assets shall calculate full depreciation for all years of asset usage until the end of the fiscal year 2022 at the rate specified in this Circular, and add it to the depreciation of the asset for the fiscal year 2023.

Clause 2. For water supply infrastructure assets that are not recorded in accounting books in accordance with Article 20 of Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance on management, use, and operation of centralized rural water supply works, amended and supplemented by Clause 9 of Article 1 of Circular No. 76/2017/TT-BTC dated July 26, 2017 of the Ministry of Finance amending and supplementing certain provisions of Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance, if they now meet the criteria for fixed assets as defined in Article 3 of this Circular, they shall continue to be managed in accordance with existing legal regulations.

Article 12. Effectiveness and Responsibility for Implementation

Clause 1. This Circular takes effect from February 1, 2023 and is applicable from the fiscal year 2023.

Clause 2. Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance on management, use, and operation of centralized rural water supply works, and Circular No. 76/2017/TT-BTC dated July 26, 2017 of the Ministry of Finance amending and supplementing certain provisions of Circular No. 54/2013/TT-BTC dated May 4, 2013 of the Ministry of Finance cease to be effective from the date this Circular takes effect.

Clause 3. Provincial People's Committees directly under the central government are responsible for directing the implementation of management, calculation of depreciation, and deduction of depreciation for water supply infrastructure assets in accordance with this Circular.

Clause 4. During the implementation of this Circular, if any difficulties arise, agencies, organizations, and units are requested to report to the Ministry of Finance for coordination in handling.

The Central Committee of the Communist Party of Vietnam;

Deputy Prime Minister and others

Office of the General Secretary;

Central Party Office and Party Committees:

State Audit Agency;

National Assembly Office;

THE SUPREME PEOPLE'S COURT:

The Government Office;

Supreme People's Procuracy;

Supreme People's Court;

Department of Finance, Department of Agriculture and Rural Development,

Central agencies of mass organizations;

Central agencies of mass organizations;

Provincial People's Councils, Municipalities directly under the Central Government;

Department of Construction of provinces, centrally administered cities;

Government Investment Corporation;

Department of Legal Normative Documents Inspection (Ministry of Justice);

Official Gazette;

Directorate of Budget, Ministry of Finance:

Lvu: VT, QLCS (46)

Government Electronic Portal;

Lvu: VT, QLCS (46)