11/3/2023

Legal regulations

Chapter 8 • VAS 03 “Tangible fixed asset”; VAS 04

“Intangible fixed asset”
FIXED ASSETS: ACQUISITION • Circular 200/2014/TT-BTC.

AND DISPOSITION
Vietnamese accounting

Definition Internal control

Control Ownership or through Read by yourself

power finance lease
• Any increase or decrease in fixed assets must be
Physical recorded, each asset has its own detail book for
Fixed Tangible or intanglie
substance
assets management purpose.
Probable future economic
For business benefit • Fixed assets are monitored in detail by each object and
Purpose type. Each asset is tracked on a detailed card (including
Value is reliable
Criteria contents, characteristics, location of use, ...).
Time: > 12 months
• Periodically, company counts for fixed assets. All cases
Value: >=30 mil VND of redundancy, lack of fixed assets must be recorded in
minutes, find reason and resolve.

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Accounting for acquisition of Fixed

DETERMINE COST OF FIXED ASSET assets

Purchase/ /build Ready to use Useful life Purchase

exchange,…
Allocate Depreciation expense

COST
Initial cost (Depreciation)
Self-construction
Initial recognition Historical cost
Intitial cost Equity distribution
At the end of each
accounting period
Carrying amount
Donation
The initial cost of a fixed asset includes the purchase price and all
other costs necessary to bring it to condition and location for use

Purchase

Account 211, 213

111,112,331… 211/213
Bal:XXX
purchase
133
VAT
Bal:XXX

Direct expense

411 441
Transfer of equity (if any)

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Example: Purchase
(use for welfare purpose)
A company purchase a fixed asset for selling department with
For your reference
purchase price is 100.000.000VND, VAT 10%, transportation cost is 111,331,... 211,213
1.100.000VND (included VAT 10%). All are unpaid.
(1)purchase
This asset is sponsored by Construction investment fund.
(Price before VAT + VAT)
DR 211 100.000.000
DR 133 10.000.000 111,112,141,333
CR 331 110.000.000 (2) Direct expense
DR 211 1.000.000
CR 133 100.000 3533 3532
CR 331 1.100.000
(3) Transfer fund
DR 441 101.000.000
CR 411 101.000.000

• Purchase asset with spare parts: • Installment purchase

For your reference

111,112 331 211,213
111,112,… 2411 211,213
Payment Instant purchase price

133
133 VAT
242 635
Allocate
Interest interest

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Example • Self-constructed asset

A company purchases an equipment and use it at company’s plant with

the instant purchase price without VAT: 180.000.000VND, 5% VAT,
installment interest (not subject to VAT) 12.000.000VND, the installment 111,152,153… 241(2) 211,213
purchase price without VAT: 192,000,000VND. Payment period is 24
months (pay on the last day of each month, starting from this month). (1)Expense for (2a) approved expense
Company has a payment for the first month by cash on hand.
Dr 211 180M
construction
Dr 133 9M 632
Dr 242 12M (2b) UNapproved expense
Cr 331 201
Dr 331 201/24
Cr 111 411 441
Dr 635 12/24 Transfer equity (approved expense)
Cr 242

Example: •Self-production:

Construction department hands over and puts into use a factory. All Ex: Issued from stock a finished good and use it as a
expenses incurred for this construction is 1.520.000.000 VND. The fixed asset at selling department with value of
approved expense is 1.500.000.000 VND.
60.000.000VND
This asset is sponsored by Construction investment fund.
Dr 2412 1,520M
Cr 331 1,520M
Dr 211 1,500 155 211
Dr 632 20
Cr 2412 1,520
Dr 441 1,500
Cr 411 1,500 Issue price

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• Equity distribution • Donation

411 211,213 Read by yourself

Value of Asset
711 211, 213
(Fair value)

111,331
Direct expense
111,331
Direct expense

Read by yourself

Disposition Disposition
211 214 711 152
• Document:
(1)Write off (3a)scrap
– Invoice cost
Acc depr
– The record of the fixed asset 811
111,131…
– Contract for sale and purchase of fixed Carrying 911 (3b)Income
assets 111,152…
amount
– Asset valuation minutes (2)Related expense

133 333

VAT

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Example: Mortgage by fixed asset

Cheney Company sold a 20-ton mechanical draw press for 60.000.000

211 244
VND, VAT 10%, receive cash in bank. The old draw press cost
77.000.000 and had a book value of 55.000.000. Transportation
expense is 1.050.000 (include VAT 5%), pay by cash on hand.

Dr 112 66
Cr 711
C 333
60
6
214
Dr 811 55
Dr 214 22
Cr 211 77

Dr 811 1
Dr 133 0.05
Cr 111 1.05 Read by yourself

Shortage asset Exchange

211 214 1388
(1)Write off (2a)Resolve (employee)

1381
811 Similar Dissimilar
(2b) Resolve (company)

Read by yourself
Do NOT recognized income Do recognized income
=> “sell” old asset, “buy”
new asset

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Exchange Exchange
Dissimilar exchange
• Similar exchange:

211A, 213A 811 711 131 211B,213B

211A 211B (1) (2) (3)
214 33311 133

111,112
214 (4)

(5)

Example:

Dr 811 300
Dr 214 60
• Exchange equipment A that is used in
the production department, with the
Cr 211 360
Property, Plant and
cost of 360mil VND, accumulated Dr 131 308
Cr 711 280
Equipment, Investment
depreciation of 60mil VND. The fair
value of this equipment is 280mil VND, Cr 333 28 Property, and Intangible
VAT 10%. Equipment A is exchanged
for a stamped machine with a price of
Dr 211 250 Assets: Utilization and
250mil VND, VAT 10%. Cash payment
Dr 133
Cr 131
25
275 Impairment
for transportation of equipment A is 1.1
mil (include VAT 10%).
Dr 211 1
Dr 133 0.1
Cr 111 1.1
28

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Principles of DEPRECIATION DEPRECIATION

For your reference
Appendix 1 / Circular 45
- All fixed assets related to operating activities (including KHUNG THỜI GIAN TRÍCH KHẤU HAO CÁC LOẠI TÀI SẢN CỐ ĐỊNH
unused assets, assets waiting for disposal) must be D - Thiết bị và phương tiện vận tải Tối thiểu Tối đa
depreciated. 1. Phương tiện vận tải đường bộ 6 10
2. Phương tiện vận tải đường sắt 7 15
- Useful life and depreciation method must be reviewed at 3. Phương tiện vận tải đường thuỷ 7 15
least at the end of each fiscal year 4. Phương tiện vận tải đường không 8 20
- Fixed assets have been fully depreciated, but still in use, do 5. Thiết bị vận chuyển đường ống 10 30
6. Phương tiện bốc dỡ, nâng hàng 6 10
not continue to depreciate 7. Thiết bị và phương tiện vận tải khác 6 10
- The depreciation of fixed asset shall begin from the date E - Dụng cụ quản lý
1. Thiết bị tính toán, đo lường 5 8
when fixed asset increases or finish when fixed asset
2. Máy móc, thiết bị thông tin, điện tử và phần mềm tin học 3 8
decreases phục vụ quản lý
3. Phương tiện và dụng cụ quản lý khác 5 10
G - Nhà cửa, vật kiến trúc
1. Nhà cửa loại kiên cố. 25 50
2. Nhà nghỉ giữa ca, nhà ăn giữa ca, nhà vệ sinh, nhà thay 6 25
quần áo, nhà để xe...

Depreciation methods ACCOUNTING FOR DEPRECIATION

Straight-line • Account: 214 – Accumulated depreciation:

Accelerated Methods (Declining Balance) - Account 2141- Accumulated depreciation of tangible fixed assets
- Account 2142- Accumulated depreciation of finance lease assets
Units-of-production method (based on actual physical use).
- Account 2143- Accumulated depreciation of intangible fixed assets
- Account 2147- Accumulated depreciation of investment properties

Dr expenses (627, 641, 642, 811....)

Cr 214

-Depreciable amount = Cost - Residual value

-Residual value = estimated selling price – related expenses

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Repair/maintenance Repair and maintenance

Situation 1: Allocate expenses over the specific period

Expense 331 2413 242 627,641,642

Short time
Ordinary off in the (1)
repair period (3) (4)
Small value incurred
Repair 152,153,111,112,...
Record in
Long time Account 2413 (2)
Significant and then
repair transfer to 133
High value prepayment
for allocation
later
33

Repair and maintenance Repair and maintenance

Situation 2: Accrue expenses before repairing fixed asset
Improvements => increase of COST
2413 352 331 2413 211, 213
152,153,111,331 627,641,642
(2) (3) (1) (1)
(3)

152,153,111,112,...

(2)

133
For your reference

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PRESENTATION AND DISCLOSURE

Example: Statement of Financial Position

• Fixed asset will be presented in Noncurrent asset with following amounts:
Atlas Trucking incurred the following costs during 2013: carrying amount, cost, Accumulated depreciation
1. Spent $15,000 on a major overhaul for a tractor-trailer II. Fixed assets
rig. The overhaul is expected to increase the service life of 1. Tangible assets Sum: carrying value
the rig by three years. - Historical costs Ending 211
2. Repaired the air conditioning system for $3,000. - Accumulated depreciation (*) (Ending 2141)
3. Rearranged and reconfigured the maintenance, loading, 2. Financial leasehold assets
and unloading facilities at a cost of $75,000. The - Historical costs
rearrangement is expected to result in substantial cost - Accumulated depreciation (*)
savings and increased efficiency over the next several 3. Intangible assets
years. - Historical costs
Required: Prepare journal entries to record the above - Accumulated depreciation (*)
costs.

For your reference

PRESENTATION AND DISCLOSURE PRESENTATION AND DISCLOSURE

Notes
• Income statement: For each group of fixed assets, disclose:
– expenses related to PPE are included in expenses by • basis for measuring carrying amount
function • depreciation method(s) used
– Gain or loss when selling PPE are in other income/other • useful lives or depreciation rates
expenses. • carrying amount and accumulated depreciation
• Cash flows
– Main flows of selling and purchasing PPE will be presented
in investing activities
– Depreciation expenses will be presented in Operating
activities (Indirect method)

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