- Report on production and business performance.
- Cash flow statement (Prepared by indirect method).
- Financial statement explanation.
At the end of each year, the General Accountant and the Financial Reporting Accountant prepare the Financial Report in accordance with state regulations. The Financial Report is prepared in many tables (including Vietnamese and English versions) and sent to relevant units (Parent Company, Tax Authority, etc.).
In addition, to improve the quality of management, the company also organizes a Management Report system that provides summary information about the company's situation for the Sanofi Group. Every month, the Chief Accountant prepares a report including a number of items such as: Cash at the fund, Bank deposit balance, Receivables, Payables, Advances for each department, etc.
2.2. Current status of fixed asset accounting organization at Sanofi-Aventis Vietnam Co., Ltd.:
2.2.1. General issues regarding fixed assets at the company:
2.2.1.1. Standards for identifying fixed assets:
According to Circular 45/2013/TT-BTC in Article 09, Clause 11: "For fixed assets that enterprises are monitoring, managing and depreciating according to Circular 203/2009/TT-BTC, which do not meet the criteria for original value of fixed assets as prescribed in Article 2 of this Circular, the fixed assets' original value shall be allocated to the enterprise's production and business expenses, the allocation period shall not exceed 3 years from the effective date of this Circular". The company handles as follows:
- In 2013, fixed asset cards imported before June 10, 2013 that do not meet the criteria for recognition as fixed assets will retain the original asset code, meaning that the grouping, classification and depreciation of fixed assets will remain the same as before, and will not be transferred to the group of low-value fixed assets. Fixed asset cards created from June 10, 2013 will have their asset codes created and depreciation recorded according to Circular 45/2013/TT-BTC.
- In 2014, the fixed assets that did not meet the criteria for recording fixed assets were stopped from being depreciated by the Accountant on the SAP system. And the Accountant and the IT department transferred the unqualified fixed assets to the group of low-value fixed assets (CCDC) and the Accountant created a new fixed asset code, then the SAP system allocated them.
Student: Nguyen Thi Tra Mi 36
Cost according to Article 9 Clause 11 Circular 45/2013/TT-BTC.
2.2.1.2. Characteristics of fixed assets:
- In the field of manufacturing and trading Lactacyd pharmaceuticals and cosmetics, most of the fixed assets are imported machinery from abroad, of great value and meeting high standards as prescribed by the Vietnamese Ministry of Health, used in many different departments but mostly concentrated in the factory, the depreciation period of fixed assets is often over 5 years.
- Many fixed assets have great value, although their depreciation period has expired, but due to good use, management and maintenance, they still participate in the company's production and business activities and are monitored monthly by the Fixed Asset Accountant.
- Fixed assets account for a large proportion of a company's total assets and are formed from the company's equity.
2.2.1.3. Classification and determination of fixed asset value:
2.2.1.3.1. Classification:
Table 2.1. Classification of fixed assets at Sanofi-Aventis Vietnam Company.
Fixed assets
First three numbers of fixed asset code | Describe | |
Fixed assets tangible | 100 | House, building |
210 | Machine | |
300 | Motor Vehicles | |
320 | Office Equipment | |
500 | Other Assets | |
600 | Assets in the low-value fixed asset group (valued under 30,000,000 VND) (Low Value Asset) (ie tools and equipment) | |
610 | Unfinished fixed assets – machinery and equipment (Machine Equipment Under Construction) | |
Construction in Process | ||
Fixed assets invisible | 330 | Computer software (Software) |
Other Intangible Assets |
Maybe you are interested!
-
Current status of auditing fixed assets items in financial statement auditing performed by International Financial Auditing and Consulting Company Limited (IFC) - 11 -
Organizing fixed asset accounting at Viet Thanh Garment and Trading Company Limited - 2 -
Current Accounting Status Determining Business Results At Thanh Son Company Limited. -
Current status of production cost accounting and pricing of food and beverage products and services at DMZ Tourism Joint Stock Company - 11 -
Completing fixed asset accounting at Mai Linh Company Limited, Hai Phong - 4
Student: Nguyen Thi Tra Mi 37
2.2.1.3.2. Fixed asset valuation:
a/ Initial value of fixed assets: determined at original price.
Most of the company's fixed assets are purchased in the form of purchases (including new and used purchases).
*In case of determining the original price of fixed assets purchased in the form of procurement:
Example 1: On January 15, 2014, the Company purchased 2 Lixn 5900 Inkjet Printers (with accessories) to print Lactacyd bottle labels at a price of VND 133,386,000/machine excluding 10% VAT. Based on VAT Invoice of VMS Trading and Technology Co., Ltd. No. AA/13P0001568, the Fixed Asset Accountant recorded the original price of the fixed assets as follows:
These two machines are given separate codes by the Accountant: 210394, 210395 (See Appendix 2.2). Purchase price of 1 machine: 133,386,000 VND, Incurred costs are 0 VND. Original price of fixed assets of 210394 = 133,386,000.
Original price of fixed assets of 210395 = 133,386,000.
*In case of determining the original price of fixed assets formed by basic construction investment under the contracting method:
Example 2: On December 24, 2013, Phu Kien Gia Company Limited received the contract for the project "Breaking down the wall to bring the DELAMA machine into room L09 of the liquid medicine workshop" for Sanofi - Aventis Vietnam Company with the final settlement price of the completed project being 70,790,000 VND. The additional costs of "Increasing the Plisma9mm panel partition" were 27,316,000 VND (See Appendix 2.3).
So the original price of fixed asset code TS 100055 = 70,790,000 + 27,316,000 = 98,106,000 VND.
b/ Depreciation value of fixed assets:
Example 3: On January 6, 2009, the Company purchased the machine “Hitachi U3900H UV Vis Spectrophotometer” with Invoice No. 0037044 for 18,908 USD (5,939.4 USD at the exchange rate of 16,151 VND and 12,968.6 at the exchange rate of 17,480 VND) and some parts including 1 DX 2300 NT Dual Core E2160 set for 750 USD and 1 LT HP 1006 printer for 140 USD (exchange rate of 17,480 VND). The usage period is 10 years. According to the regulations of February 2009, the fixed assets will start to be depreciated (See Appendix 2.4).
So the original price of fixed assets is:
Student: Nguyen Thi Tra Mi 38
(1) UV spectrophotometer: | 5,939.4 x 16,151 | = | 95,927,249 |
12,968.6 x 17,480 | = | 226,691,128 | |
(2) DX 2300 NT Set: | 750 x 17,480 | = | 13,110,000 |
(3) HP 1006 LT Printer: | 140 x 17,480 | = | 2,447,200 |
Original price of fixed assets | = (1) + (2) + (3) | = | 338,175,577 |
Monthly depreciation is: 338,175,577
= 2,818,129.808
10 x 12
Accumulated depreciation (GTHM) up to the end of June 2014 is: 2,818,129,808 x 65 = 183,178,437.5 VND.
c/ Remaining value of fixed assets:
Example 4: Continue using example 3 to calculate the GTCL of the machine "Hitachi U3900H UV Vis Spectrophotometer" (See Appendix 2.4). So the remaining value of that machine at the end of June is:
338,175,577 – 183,178,437.5 = 154,997,139.5 VND.
2.2.1.4. Requirements for fixed asset management at the company:
Due to the characteristics of fixed assets, the company is required to have strict management measures to ensure meeting usage requirements and improving the efficiency of using the company's fixed assets.
- Physical management: Fixed assets when purchased (new or used) or when completed and handed over after basic construction are inspected by technical experts. If they meet the requirements, they will be handed over to each department or individual for direct use. In departments that directly use fixed assets, the Department Head uses the "Fixed Asset Book by Department" to monitor the increase and decrease of fixed assets.
- Value management: In the company's accounting department, the Accountant uses "Fixed Asset Card", "Depreciation Table" and some other books as required to monitor the increase, decrease and depreciation of fixed assets.
To require more effective management of fixed assets in the company, the Accountant has created a fixed asset code.
* Fixed Asset Code: All fixed assets of the company must be labeled with a fixed asset code, which is a code to record the fixed asset in the system, symbolized by 6 numeric characters and automatically numbered by the SAP system. Particularly for fixed assets in the office block and computer room, there is an additional serial number.
Student: Nguyen Thi Tra Mi 39
that machinery and equipment
The code label shows the following information:
Asset code: Company:
Serial number:
1 2 3 4 5 6
SAV
Serial number of machinery and equipment
Fixed asset code is formed according to the following content:
- The first three digits of the fixed asset code are mandatory (See table 2.1 above).
- The next three digits of the fixed asset code will be automatically entered by the SAP system.
Example 5: On August 28, 2013, the company purchased the Climatic Chamber KBF720 machine for VND 430,000,000 (See Appendix 2.5). This machine qualifies as a fixed asset and belongs to the group of machinery and equipment. The fixed asset accountant builds the fixed asset code as follows:
- The first three digits of the fixed asset code are 210.
Fixed Asset Code:
Company:
210378
SAV
- The next three digits of the fixed asset code are automatically numbered by the SAP system as 378. So the label of this fixed asset code is:
* Issuing fixed asset labeling allocation:
On the last working day of the month, the Fixed Assets Accountant coordinates with the Technical Department (For factories), or the Computer Department (For IT equipment), or the Administrative Department (For other equipment) to print out the code sets of assets that increased during the month. In the first week of the following month, the department responsible for labeling the asset codes must do so immediately after the Accounting Department sends all the code sets of assets that increased during the month.
* Assignment of labeling codes on fixed assets (See Appendix 2.6).
2.2.2. Accounting for increase in fixed assets:
2.2.2.1. Documents used:
* For all fixed assets that are machinery and equipment except computers:
(1) Copy of e-AED (AED – Expenditure Commitment Authorization/Disposal).
(2) Copy of purchase requisition
(3) Copy of Purchase Order.
Student: Nguyen Thi Tra Mi 40
(4) Copy of VAT Invoice.
(5) Copy of Fixed Asset Purchase Contract.
(6) Copy of invoice for receiving costs, shipping, import tax, etc.
(7) Copy of Fixed Asset/Equipment Receipt and Fixed Asset/Equipment Inspection Form or Minutes of handover and acceptance of spare parts and machinery.
(8) Record of new fixed asset.
* For fixed assets that are construction projects and major repairs of fixed assets:
- Copy of VAT Invoice.
- Fixed Asset Card.
- Fixed Assets/Equipment Inspection Certificate.
- Copy of e-AED.- Minutes of project acceptance. - Detailed construction progress table. - Copy of construction and repair contract. |
* For fixed assets being computers (Desktop or laptop):
- Have all documents from (1) to (6) and (8) (See above).
- Due to the nature of fixed assets such as computers, the depreciation period is exactly equal to the warranty period, so it is not necessary to prepare a Fixed Asset Inspection Form and replace the Fixed Asset Inspection Form with a Computer and Equipment Inspection List.
2.2.2.2. Procedures for regulating and circulating documents:
*For all fixed assets that are machinery and equipment except computers:
For the purchase of fixed assets, the Department requires the establishment of e-AED for approval, and compliance with the “Budget Approval and Grant Procedure” and “Non-Inventory Purchasing” procedures.
After the e-AED is approved, the Requesting Department will create a “Purchase Request”. After approval, the Requesting Department will send a “Copy of e-AED” and a “Copy of Purchase Request” to the accounting department so that the Fixed Asset Accounting can create a fixed asset code (Asset Code) on the system, requiring the following information:
- The code of each approved e-AED (Internal Order No (IO Code-Investment Order No)).
Student: Nguyen Thi Tra Mi 41
- Cost Center Code: This code is defined and used internally to facilitate accountants in recording costs in the correct department and exporting related reports from the SAP system.
- Number of years of depreciation of fixed assets: within the fixed asset depreciation time frame according to Circular 45/2013/TT-BTC of the Ministry of Finance and according to the regulations of Sanofi Group.
Based on the above information, Fixed Asset Accounting creates a code for the new asset. Each fixed asset must have its own asset code (See the requirements for managing fixed asset codes).
After creating the asset codes, the Fixed Asset Accountant provides the Purchasing Department with these codes according to the quantity stated in the approved “Purchase Request” and some other related documents (if any). At the same time, the Requesting Department sends the approved “Original e-AED” and “Original Purchase Request” to the Purchasing Department to carry out the next steps according to the non-inventory purchasing regulations.
After receiving the machinery and equipment and conducting the inspection, within three days from the date of completion of the inspection, the Department is required to send the Fixed Assets Accounting the “Fixed Assets Receipt” and “Copy of the Fixed Assets Purchase Contract”. At the same time, the Purchasing Department transfers the “Original VAT Invoice” and “Original Purchase Contract” to the Payment Accountant immediately after receiving the assets and accompanying documents such as Purchase Order, Invoice for receiving costs, transportation, import tax (if any)… for the Payment Accountant to make payment according to the procedure.
*For fixed assets that are construction projects and major repairs of fixed assets:
The implementation process is similar to that of fixed assets, which are machinery and equipment. However, the difference is that the Department is required to notify the Fixed Assets Accountant that the construction project has started and the “Detailed construction progress table”, “Copy of the factory construction and repair contract” within 3 days from the commencement date. After the factory construction project completes the inspection and acceptance, the Department with the request must send the “Fixed Assets Inspection Form” or “Construction Acceptance Report” to the Fixed Assets Accountant within three days from the date of signing. After that, the Fixed Assets Accountant sends the “Copy of the Fixed Assets Inspection Form” and the “Construction Acceptance Report” to the Payment Accountant.
Student: Nguyen Thi Tra Mi 42
*For fixed assets being computers (Desktops and laptops):
The document circulation process is similar to that for fixed assets such as machinery and equipment.
Accountants record an increase in fixed assets when:
- For fixed assets that are unfinished construction works: upon receiving notification from the Department requesting that construction and repair works have begun, a detailed construction progress table and a copy of the Factory Construction and Repair Contract.
- For fixed assets being machinery and equipment: upon receiving the Fixed Asset Inspection Certificate. Particularly for the factory block, the Fixed Asset Accountant records an increase in fixed assets upon receiving the Fixed Asset Inspection Certificate with confirmation from the factory block's Financial Controller regarding the completion of the costs of forming the fixed assets and the Accounts Payable Accountant posts the date of completion of payment of amounts related to fixed assets to the SAP system.
On the last working day of the month, the Fixed Asset Accountant coordinates with relevant departments to allocate and label fixed assets. After recording the increase in fixed assets, the Fixed Asset Accountant will save all documents related to a fixed asset in a separate file to track details according to the fixed asset object, type of fixed asset, and location of storage, use, and management of the fixed asset. This file is arranged according to the fixed asset code. The remaining documents in which department are responsible for saving and checking.
2.2.2.3. User account:
Accountants use account 211 "Tangible fixed assets" and account 213 "Intangible fixed assets" to reflect the existence and fluctuations of fixed assets owned by the company at original price.
Student: Nguyen Thi Tra Mi 43