LIQUIDATION OF FIXED ASSETS OF THE ENTERPRISE

1. Concept

Liquidation of fixed assets (liquidation of fixed assets) refers to the process of getting rid of fixed assets, such as buildings, machinery and equipment that are no longer useful or necessary for a business or organization. The disposal may involve the sale, transaction, gift or disposal of assets.

2. Regulations on liquidation of fixed assets:

According to Point 3.2, Clause 3, Article 35 of Circular 200/2014/TT-BTC and Clause 1, Article 31 of Circular 133/2016/TT-BTC, regulations on 3 cases of liquidation of fixed assets:

• The property is damaged and cannot be used anymore.
• Assets are outdated and no longer suitable for the needs of the business.
• Enterprises merge, sell or dissolve.

Regarding procedures for liquidation of goods of EPEs, it is stipulated in Article 79 of Circular 38/2015/TT-BTC, which has been amended and supplemented in Clause 55, Article 1 of Circular 39/2018/TT-BTC , specifically:

• EPEs are allowed to liquidate imported goods including: machinery, equipment, means of transportation, raw materials, supplies and other imported goods owned by the enterprise in the following forms: export, sale, donated, donated, or destroyed in Vietnam.

3.   Requirements for liquidation

When liquidating fixed assets: The enterprise must make a liquidation decision and establish a fixed asset liquidation council . The Fixed Asset Liquidation Council is responsible for organizing the liquidation of fixed assets according to the correct order and procedures in the financial management regime and preparing a Minute of Liquidation according to the prescribed form.

The liquidation record is made into 2 copies, 1 copy is transferred to the accounting department for monitoring and recording, 1 copy is handed over to the fixed asset management and use department.

Based on the Liquidation Minutes and documents related to revenues and expenses from liquidation of fixed assets, the accountant records the books as in the case of sale of fixed assets.

According to Clause 1, Article 38, Circular 200/2014/TT-BTC and Clause 1, Article 32, Circular 133/2016/TT-BTC stipulates:

"d) For fixed assets that have been fully depreciated (fully recovered capital), but are still used in production and business activities, depreciation cannot be continued. Fixed assets that have not been fully depreciated (have not been fully depreciated yet) recover enough capital) but are damaged and need to be liquidated, the cause and responsibility of the collective and individual must be determined to handle compensation and the remaining value of the fixed asset that has not been recovered and cannot be compensated. must be compensated with the proceeds from liquidation of that fixed asset, the compensation amount is decided by the business leaders. If the liquidation revenue and compensation revenue are not enough to offset the remaining value of the uncollected fixed assets recovered, or the value of the fixed asset is lost, the remaining difference is considered a loss on liquidation of the fixed asset and accounted for as other expenses.

Note: For fixed assets that are not needed, waiting for liquidation but have not yet been fully depreciated, enterprises must manage, monitor, preserve according to current regulations and depreciate according to the provisions of Circular 45/ 2013/TT-BTC.

4. Liquidation procedures:

• In case of liquidation in the form of export, the enterprise must register an export customs declaration;
• In case of liquidation in the form of sale, donation or donation in the Vietnamese market, the EPE may choose to do so in one of the following two forms:
  • In case an EPE chooses to change the purpose of use, it must register a new customs declaration, tax policy, and imported goods management policy applied at the time of registering the customs declaration of transferred imported goods. purpose of use (except in cases where at the time of initial import procedures, import management policies have been fully implemented); The tax base is the taxable value, tax rate and exchange rate at the time of registering the declaration of change of use specified in Article 21 of this Circular. After changing the purpose of use, the sale, donation, or donation of these goods in the Vietnamese market does not require customs procedures;
  • In case an export processing company chooses to carry out on-site import and export procedures according to the provisions of Article 86 of Circular 38/2015/TT-BTC, the export processing company will carry out on-site export procedures; Domestic enterprises carry out on-site import procedures and pay taxes according to regulations. At the time of carrying out on-site export and import procedures, the policy on management of exported and imported goods is not applied, except in cases where the goods are subject to management according to conditions, standards, and specialized inspections that have not yet been carried out. current upon initial import; Goods managed by license must be approved in writing by the import licensing agency.
• In case of destruction, comply with the provisions at Point d, Article 64 of Circular 38/2015/TT-BTC. In terms of Accounting, if an enterprise accounts according to Circular 133 or Circular 200, it must follow the provisions of that Circular.

5. Documents for liquidation of fixed assets:

• Decision to establish a Fixed Asset Liquidation Council
• Minutes of meeting of the Fixed Asset Liquidation Council
• Decision to liquidate fixed assets
• Record of fixed asset inventory,
• Minutes of re-evaluation of fixed assets
• Minutes of liquidation of fixed assets
• Economic contract to sell liquidated assets
• Invoice for sale of fixed assets
• Minutes of delivery and receipt of fixed assets
• Minutes of destruction of fixed assets
• Minutes of liquidation of fixed asset sale contract

Above is an article clarifying the liquidation of fixed assets of an enterprise . In addition, to update good articles about import-export or ship freight rates; train schedule. Customers can follow the fanpage to be updated with the latest articles.

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