technology, damaged assets awaiting liquidation, disputed fixed assets awaiting resolution. Businesses need to quickly handle these fixed assets to recover capital.
b. Fixed asset valuation:
Fixed asset accounting must accurately record the original price, depreciation value and remaining value of each fixed asset in use, unused, unnecessary or liquidated.
* For tangible fixed assets:
Depending on each specific type of fixed asset, the original value of the fixed asset is determined differently. Specifically:
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- Purchased fixed assets: Original price includes purchase price stated on invoice (+) plus related costs (transportation, installation...) (+) plus import tax (-) minus discount (if any).
- Fixed assets handed over by the basic construction department: Original price includes the actual price of the handed-over project (+) plus construction loan interest, when the project is completed and handed over but not yet put into use (+) plus related costs (+) plus expenses before use (-) minus discount (if any).
- Fixed assets handed over by the contractor: Original price includes the price paid to the contractor (+) plus expenses before use (-) minus discount (if any).
- Fixed assets are granted and transferred to:
+ If it is an independent accounting unit: Original price includes the remaining value recorded in the books of the issuing unit (+) with new costs before use that the recipient must pay (installation costs, testing costs...).
+ If transferred between dependent accounting members, the original price includes the remaining value, accumulated depreciation recorded in the books of the units providing the new expenses before use, which are directly reflected in the production and business costs without being included in the original price of fixed assets.
+ Fixed assets receiving joint venture capital, receiving back joint venture capital: Original price includes actual valuation price of the valuation council (+) plus expenses.
* For intangible fixed assets:
Are all actual costs incurred when carrying out business establishment costs, research and development costs, patent purchase costs... Specifically:
- The original price of land and land use rights includes all actual costs incurred directly related to land and land use rights such as: compensation costs, clearance, registration tax...
- The original cost of research and development includes all actual costs that the enterprise has spent to carry out research and exploration work for long-term investment plans to bring long-term benefits to the enterprise.
- The original cost of establishing a business includes actual and reasonable costs incurred in connection with the establishment of the business such as: preparation, exploration, research costs...
- Costs of inventions, patents... original price includes actual costs that the enterprise has spent on research projects such as: trial production costs, testing of trademark copyrights...
- Cost of commercial advantage: Original price is the difference in cost that the enterprise must pay in addition to the value of the asset according to the actual assessment when the enterprise purchases such as: advantages in location, reputation, skill level...
* For financial leased fixed assets:
According to the provisional decision in Vietnam, a financial leasing transaction must satisfy one of four conditions:
- At the end of the lease contract, the lessee receives ownership of the leased property or continues to lease according to the agreement.
- At the end of the lease contract, the lessee has the option to purchase the leased asset at a nominal price lower than the actual value of the leased asset at the time of purchase.
- The lease term must be at least 60% of the time required to depreciate the asset.
- The total rental amount payable must be at least equivalent to the market price of the property at the time of signing the contract.
If a lease does not satisfy any of the four conditions above, it is considered an operating lease.
Fixed asset valuation is extremely important in calculating product costs and providing information to managers:
+ Valuing fixed assets at original cost helps businesses evaluate
correct production capacity, technical facilities and fixed asset usage efficiency.
+ Monitor capital recovery and capital accumulation for business reproduction through fixed asset depreciation.
+ Evaluating fixed assets based on residual value helps businesses know the current status of fixed assets and existing fixed capital, thereby having a plan to invest in purchasing fixed assets.
+ The original price of fixed assets can only be replaced when there is a decision to re-evaluate fixed assets, upgrade, or dismantle one or several parts of the fixed assets.
The original cost of financial leased fixed assets can be calculated in different ways.
each other
+ Calculated based on the present value of the rental amount:
PV
FV
(1 r) t
In which: - PV: present value of rent
- FV: total rent payable
- r: interest rate
- t: number of rental periods
+ According to the current trend, the tenant and the landlord agree that during the rental period, the amount to be paid at the end of each period and each year is the same. So:
Amount to be paid regularly
=
Annual (periodic)
PVx t
1 1
(1 r) t
+ Calculated by the principal payable: If the contract states the total amount of rent payable (principal + interest), interest payable each period (year); number of rental periods. The amount the lessee must pay for the entire rental period, in which the interest payable in each period is clearly stated.
Original price of financial leased fixed assets
Total amount paid
=
by contract
Interest payable
- x
every period
Number of rental periods
3. Contents of fixed asset accounting organization in production units.
Fixed asset accounting is the process of forming, selecting and providing information on the fluctuations of fixed assets of the enterprise on the basis of establishing a system of documents and books. The purpose of accounting is to closely monitor and manage fixed assets on the basis of providing economic information on fixed assets in a complete, timely and accurate manner.
Fixed asset accounting organization includes:
+ Detailed accounting.
+ General accounting.
a. Detailed accounting of fixed assets.
During the production and business activities, fixed assets of enterprises often fluctuate. To properly manage fixed assets, accountants need to monitor in detail all cases of increase or decrease in fixed assets.
- When there is an increase or decrease in fixed assets, the enterprise must establish an acceptance committee to receive fixed assets or liquidate them to assess the remaining value and then make a record of liquidation of fixed assets. These records are recorded in many copies (depending on the requirements of each enterprise), one copy is sent to the accounting department for accounting to enter into the detailed book and fixed asset accounting card.
Traffic Law
Shipping voucher
Fixed Asset Receipt
Fixed Assets
Accounting books
detail
- To account for fixed assets in detail, the following documents and records are required:
+ Invoices, shipping documents...
+ Copies of technical documents.
+ Minutes of delivery and liquidation of fixed assets, fixed asset cards, minutes of fixed asset evaluation.
+ Fixed assets detail book.
- Based on the fixed asset records, the accounting department opens a fixed asset book or card to account in detail according to a unified form. The fixed asset card is made into a copy for the accounting department to follow the accounting developments arising within the framework of a fixed asset usage process. The fixed asset book is made in one book for the entire enterprise and one book for each member unit.
- Then each unit or department (workshop, department of the enterprise opens a book to track assets).
b. General accounting of fixed assets.
b.1. Accounting accounts used.
According to the current regime applied to enterprises including fixed assets from January 1, 1996 of the Ministry of Finance. Fixed assets are tracked on the following accounts:
* Account 211: Fixed assets in use.
- Debit side: Reflects transactions that increase fixed assets at original price due to purchase, construction, allocation, etc.
- Credit side: reflects transactions that reduce fixed assets according to original price due to liquidation, sale, revaluation...
- Outstanding debt: Current value of fixed assets of the enterprise.
* Account 212: Financial leased fixed assets.
- Debit: Original price of financial leased fixed assets increases.
- Credit side: Original price of financial leased fixed assets decreases.
- Credit balance: Original price of existing financial lease fixed assets.
* Account 213: Intangible fixed assets.
- Debit: Original price of intangible fixed assets increased.
- Credit side: Original price of intangible fixed assets decreases.
- Outstanding balance: Current value of intangible fixed assets.
* Account 214: depreciation of fixed assets.
- Debit side: Fixed asset depreciation decreased due to sale, liquidation...
- Credit: Fixed asset depreciation increases due to depreciation.
- Credit balance: Depreciation value of fixed assets in the enterprise.
*TK214: Construction in progress costs.
- Debit side: Investment costs for purchasing, renovating, upgrading fixed assets...
- Credit side: Value of fixed assets formed through completed investment and purchase
put into use..
- Outstanding debt: Unfinished construction costs and unfinished major repairs or
completed not delivered
b.2. Accounting for increase in tangible fixed assets.
-Increase due to equity purchases.
+ bi1: Record increase in original value of fixed assets.
Debit account 211: Original price of fixed assets.
Debit account 133: deductible VAT.
Credit account 111, 112: Total amount paid. Credit account 331: Total amount payable.
+ BT2: Based on the source formed during the purchasing process, accounting transfers increased business capital.
Debit account 414: use investment and development fund to buy. Debit account 431: use reward (welfare) fund. Debit account 441: Use construction and development fund to buy.
Credit account 411: Business capital
- Increase due to purchases using borrowed funds.
Debit account 211: original price of fixed assets.
Debit 133: deductible VAT. Credit account 341: Long-term loan.
- Increase due to purchase but must be installed. BT1: Collect installation costs.
Debit account 241: Construction in progress costs.
Credit account 111, 112: Total amount paid. Credit account 331, 334, 338: Payables.
There is account 133 VAT deductible.
BT2: When the handover is completed.
Debit account 211: Original price of fixed assets. Credit account 241.
+ BT3: Based on the source of formation to transfer capital.
Debit account 414: Use development investment fund to compensate. Debit account 431: Use reward fund (welfare). Debit account 441: Use construction investment fund to buy.
Credit account 411: Business capital
- Increase in fixed assets due to construction handover.
+BT1: Collect construction costs. Debit account 2142: construction costs
There is account 152: raw material costs.
Credit account 153, 1421: tool and equipment costs
Account 334, 338: salary expenses and salary deductions.
+ BT2: When the construction project is completed and handed over.
Debit account 211.
Credit account 2412: original price of fixed assets.
+ BT3: Based on the source of formation to transfer business capital.
Debit account 414, 4312, 441
Have account 411
- Increase due to receiving joint ventures in the form of fixed assets: based on the price of the joint venture contract, the accountant will record it in the books.
Debit account 211
Have account 411
- Receive back joint venture capital from other units in fixed assets. Debit account 211: original price (remaining value)
Credit account 128: short-term joint venture capital Credit account 228: long-term joint venture capital
- Increase due to revaluation of fixed assets.
*BT1 Reflects the difference in depreciation cost.
Debit account 421
Have account 214
+ BT2: Reflects the difference in the original price increase.
Debit account 211
Have account 412
- Increase due to tools and equipment being converted into fixed assets. Example 1: If the tools and equipment are new and unused.
Debit account 211
There is account 153.1
BT2 If the fixed assets have been put into use Debit account 211: Original price
Credit account 214.1: distributed value
Credit account 142.1: Remaining value not included in value
- Increase in fixed assets due to discovery of excess costs during inventory.
If this fixed asset is in excess because the enterprise has left it off the books and has not recorded it, the accountant will record an increase in the original value of the fixed asset and, depending on the capital source, transfer the business capital and simultaneously record an additional depreciation entry.
+ BT1: Record increase in original price: Debit account 211