THE NATIONAL ECONOMICS UNIVERSITY CENTER FOR ADVANCED EDUCATIONAL PROGRAMS **************************** BACHELOR’S THESIS IN ACCOUNTING Topic Accounting Improvement for Tangible Fixed Assets and Its D[.]
THE NATIONAL ECONOMICS UNIVERSITY CENTER FOR ADVANCED EDUCATIONAL PROGRAMS **************************** BACHELOR’S THESIS IN ACCOUNTING Topic Accounting Improvement for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation Student’s name : Mai Dieu Ly Student code : 11122413 Class : Advanced Accounting 54B Internship guide : Hoang Le Son, PhD Supervisor : Tran Manh Dung, PhD, CPA Hanoi - 2016 ACKNOWLEDGEMENTS The learning time at university gave me a lot of knowledge and skills to serve my future career However, knowledge is not everything Therefore, I need to accumulate more and more experience And the accounting internship at Vietnam Multimedia Corporation helped me apply theory to practice Internship is the useful basis for me before entering my official job To fulfill this internship period, besides my own efforts, I also received great support from my university, my faculty, my supervisor and Vietnam Multimedia Corporation First of all, I want to thank my university – The National Economics University and Center for Advanced Educational Programs for creating an opportunity for me to participate in this useful internship Therefore, I have accumulated several experiences and skills after studying at university Next, I would like to thank the enthusiastic support of my supervisor Tran Manh Dung, PhD, CPA He has guided me during my internship as well as helped me complete my bachelor's thesis Finally, I would like to send my gratitude to Vietnam Multimedia Corporation, especially Mr Hoang Le Son, PhD – Chief Accountant of the company The company has given a chance for me to experience working culture in the business as well as apply knowledge to actual accounting job Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly TABLE OF CONTENTS ACKNOWLEDGEMENTS i STATUTORY DECLARATION iv ABBREVIATION v LIST OF TABLES .vi LIST OF FIGURES vii ABSTRACT CHAPTER 1: INTRODUCTION 1.1 The Rationale of the Thesis 1.2 Research Objectives 1.3 Research Methodology .3 1.4 Research Scope CHAPTER 2: THEORETICAL FRAMEWORK OF ACCOUNTING FOR TANGIBLE FIXED ASSETS AND ITS DEPRECIATION 2.1 Tangible Fixed Assets and Its Depreciation .5 2.1.1 Definition of Tangible Fixed Assets and Its Depreciation 2.1.2 Characteristics of Tangible Fixed Assets .9 2.1.3 Management of Tangible Fixed Assets 15 2.2 Accounting for Tangible Fixed Assets and Its Depreciation 15 2.2.1 Accounting for Tangible Fixed Assets .15 2.2.2 Accounting for Depreciation of Tangible Fixed Assets .23 CHAPTER 3: THE CURRENT SITUATIONS OF ACCOUNTING FOR TANGIBLE FIXED ASSETS AND ITS DEPRECIATION AT VIETNAM MULTIMEDIA CORPORATION 29 3.1 Overview of Vietnam Multimedia Corporation .29 3.1.1 History and Development 29 3.1.2 Business Operation and Organizational Structure 31 3.1.3 Financial Position and Operational Results 32 3.1.4 Accounting Department Structure and Accounting System .35 Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly 3.2 Characteristics and Management of Tangible Fixed Assets at Vietnam Multimedia Corporation 41 3.2.1 Characteristics of Tangible Fixed Assets 41 3.2.2 Fluctuation of Tangible Fixed Assets 45 3.2.3 Management of Tangible Fixed Assets 48 3.3 Current Situation of Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation 51 3.3.1 Detailed Accounting for Tangible Fixed Assets 52 3.3.2 General Accounting for Tangible Fixed Assets 75 CHAPTER 4: DISCUSSION AND RECOMMENDATIONS FOR IMPROVING ACCOUNTING FOR TANGIBLE FIXED ASSETS AND ITS DEPRECIATION AT VIETNAM MULTIMEDIA CORPORATION .85 4.1 Remarks on Current Situation of Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation 85 4.1.1 Advantages of Accounting for Tangible Fixed Assets and Its Depreciation85 4.1.2 Disadvantages of Accounting for Tangible Fixed Assets and Its Depreciation 89 4.2 Suggestions for Improving Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation 91 4.2.1 Implementation of Legal Provisions 91 4.2.2 Management and Use of Tangible Fixed Assets 92 4.2.3 Accounting for Tangible Fixed Assets and Its Depreciation 94 CONCLUSION 97 REFERENCES 98 APPENDIXES Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Bachelor’s Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper Hanoi, 01/06/2016 Signature Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly ABBREVIATION Acc Account Cr Credit Dr Debit FPD Finance and Planning Department IAS International Accounting Standards MIC Ministry of Information and Communications MoF Ministry of Finance ODA Official Development Assistance VAS Vietnamese Accounting Standard VAT Value Added Tax VND Vietnam Dong VTC Corporation Vietnam Multimedia Corporation Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly LIST OF TABLES Table 2.1: Adjustment Coefficient for the Calculation of Adjusted Reducing Balance Method 25 Table 3.1: Financial Position of VTC Corporation Through Years 33 Table 3.2: Operational Results of VTC Corporation Through Years 34 Table 3.3: List of Some Tangible Fixed Assets of VTC Corporation 42 Table 3.4: Summary Table of Some Tangible Fixed Assets of VTC Corporation in 2015 .44 Table 4.1: Classification of Tangible Fixed Assets According to Situation of Use 93 Table 4.2: Summary Table of Fixed Assets .95 Table 4.3: Fixed Asset Detailed Book in Each Department .96 Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly LIST OF FIGURES Figure 1.1: Secondary Data Collection Figure 1.2: Primary Data Collection Figure 2.1: Accounting for Increase in Tangible Fixed Assets by Purchase .19 Figure 2.2: Accounting for Decrease in Tangible Fixed Assets by Liquidation, Sale 22 Figure 2.3: Accounting for Depreciation of Fixed Assets 28 Figure 3.1: Organizational Structure of VTC Corporation 32 Figure 3.2: Accounting Department Structure at VTC Corporation 36 Figure 3.3: Recording Process of Computerized Accounting Form 40 Figure 3.4: Procurement Process of Tangible Fixed Assets at Vietnam Multimedia Corporation 50 Figure 3.5: Quotation of Sieu Thanh Corporation .54 Figure 3.6: Proposal for Purchase Photocopier 55 Figure 3.7: Sales Contract for Purchase Office Equipment .56 Figure 3.8: VAT Invoice 59 Figure 3.9: Minutes of Hand-over and Inspection .60 Figure 3.10: Proposal of Liquidating Fixed Assets 62 Figure 3.11: Decision of Fixed Assets Liquidation 63 Figure 3.12: Minutes of Fixed Assets Liquidation .64 Figure 3.13: Invoice 65 Figure 3.14: Minutes of Liquidated Fixed Assets Hand-over 66 Figure 3.15: Fixed Asset Card (Photocopier Ricoh MP3053) 67 Figure 3.16: Fixed Asset Book (Photocopier Ricoh MP3053) 68 Figure 3.17: Fixed Asset Detailed Book (Photocopier Ricoh MP3053) 69 Figure 3.18: Summary Table of Fixed Assets (Photocopier Ricoh MP3053) 70 Figure 3.19: Fixed Asset Card (Broadcasting Column) .71 Figure 3.20: Fixed Asset Book (Broadcasting Column) 72 Figure 3.21: Fixed Asset Detailed Book (Broadcasting Column) .73 Figure 3.22: Summary Table of Fixed Asset (Broadcasting Column) .74 Figure 3.23: General Journal 76 Figure 3.24: Ledger (Account 211) 77 Figure 3.25: Depreciation Allocation Table .80 Figure 3.26: Depreciation Detailed Book 81 Figure 3.27: Ledger (Account 214) 83 Figure 4.1: Asset Management on BRAVO Software 87 Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly ABSTRACT Internship is a period that helps students have an opportunity to approach directly to businesses In addition to learning the knowledge in the university, students need to apply that knowledge in fact Therefore, internship helps students reinforce their knowledge learned in the university and practice their skills to prepare for their job in the future Internship is very important for every majors, especially for accounting In order to complete my internship, I choose a business in the field of service – Vietnam Multimedia Corporation After learning and practicing at the company, I had accumulated many basic and actual skills about corporate culture as well as accounting profession in business environment This bachelor's thesis was also the result I achieved after internship period at the company I have chosen the topic "Accounting Improvement for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation" for my research The thesis includes four main and important contents that are presented as follows: CHAPTER 1: Introduction CHAPTER 2: Theoretical Framework of Accounting for Tangible Fixed Assets and Its Depreciation CHAPTER 3: The Current Situations of Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation CHAPTER 4: Discussion and Recommendations for Improving Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation Each chapter will provide in details about specific contents such as the rationale of the thesis, theoretical framework of accounting for tangible fixed assets, the current situations at the company about accounting for tangible fixed assets Finally, it is my analysis and personal recommendations about improving accounting for tangible fixed assets at Vietnam Multimedia Corporation Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly CHAPTER 1: INTRODUCTION 1.1 The Rationale of the Thesis Fixed assets play a key part in a company for running businesses They are considered as essential facilities in production and business activities Therefore, fixed assets contribute to the increase of labor productivity and the development of the economy For instance, from the micro perspective, machinery and manufacturing process are factors which determine the scale and production capacity of enterprises From macro perspective, they are the basis to evaluate the robustness of infrastructure and facilities of the whole economy The improvement, innovation and effective use of fixed assets are decisive factors in the survival and development of enterprises and the economy Fixed assets as well as the accounting for fixed assets are major concerns of businesses and managers Fixed assets have a big value and a long turnaround times As a result, we need a good organization of the accounting for fixed assets to track the fluctuation of fixed assets, improve efficient use, and maximize profitability as well as firm value Fixed assets must go through many business cycles to fully complete a rotation of the initial capital Thus, the accounting for fixed assets is an essential task It is a part in business strategy of the enterprise which helps managers to manage the initial capital And then, they can find reasonable operating measures and set the correct direction to improve the efficiency of production and business processes as well as affirm the company's position on the market Nowadays, along with the development of science and technology, fixed assets are equipped more and more modern into the businesses Since then, we need to manage strictly them in terms of value and artifacts In terms of artifacts, we have to monitor the preservation and use of fixed assets to control the quantity and current status In terms of value, we have to track the costs, depreciation, and residual value of fixed assets Derived from the reasons mentioned above, and along with the guidance of my supervisor Tran Manh Dung, PhD, CPA during my internship, I have chosen the theme "Accounting Improvement for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation" Tangible fixed assets contribute to improving labor productivity In the market economy, tangible fixed asset is an important factor to create competitiveness for businesses Therefore, in my research, I focus only on tangible fixed assets and the accounting for tangible fixed assets with the case study of Vietnam Multimedia Corporation Supervisor: Tran Manh Dung, PhD, CPA Student: Mai Dieu Ly ... OF ACCOUNTING FOR TANGIBLE FIXED ASSETS AND ITS DEPRECIATION 2.1 Tangible Fixed Assets and Its Depreciation 2.1.1 Definition of Tangible Fixed Assets and Its Depreciation 2.1.1.1 Tangible Fixed. .. Accounting for Tangible Fixed Assets and Its Depreciation 89 4.2 Suggestions for Improving Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation. .. Situation of Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation 85 4.1.1 Advantages of Accounting for Tangible Fixed Assets and Its Depreciation8 5