Accounting improvement for tangible fixed assets and its depreciation at vietnam multimedia corporation

INTRODUCTION

The Rationale of the Thesis

Fixed assets are crucial for business operations, serving as essential components in production and commercial activities They enhance labor productivity and drive economic growth At the micro level, machinery and manufacturing processes dictate the scale and production capacity of companies, while at the macro level, they provide a foundation for assessing the strength of a nation’s infrastructure The enhancement, innovation, and efficient utilization of fixed assets are vital for the survival and growth of both businesses and the broader economy.

Effective management and accounting of fixed assets are crucial for businesses, as these assets represent significant value and have long turnover times Proper organization of fixed asset accounting is essential for tracking fluctuations, enhancing utilization, and maximizing profitability and overall firm value Fixed assets undergo multiple business cycles before fully rotating the initial capital, making their accounting a vital component of a company's strategy This process enables managers to oversee initial capital effectively, identify appropriate operational measures, and establish the right direction to boost production efficiency and strengthen the company's market position.

In today's rapidly advancing technological landscape, businesses are increasingly modernizing their fixed assets, necessitating stringent management of both their value and physical condition Effective management involves closely monitoring the preservation and utilization of these assets to maintain accurate records of their quantity and current status Additionally, businesses must diligently track costs, depreciation, and the residual value of fixed assets to ensure financial accountability and optimal resource allocation.

Guided by my supervisor, Dr Tran Manh Dung, CPA, during my internship, I have selected the theme "Accounting Improvement for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation." Tangible fixed assets play a crucial role in enhancing labor productivity and are vital for establishing a competitive edge in the market economy Consequently, my research will concentrate exclusively on the accounting practices related to tangible fixed assets, using Vietnam Multimedia Corporation as a case study.

Báo cáo thực tập tổng hợp

Research Objectives

This research aims to analyze and evaluate the accounting practices for tangible fixed assets and their depreciation at Vietnam Multimedia Corporation It will identify the strengths and weaknesses of the current system, explore their underlying causes, and offer recommendations for enhancing the accounting processes related to tangible fixed assets within the corporation.

Specific objectives of the research are:

 To clarify basic contents of tangible fixed assets and its depreciation in a business.

 To analyze and evaluate the accounting for tangible fixed assets with typical case study of Vietnam Multimedia Corporation.

 To propose feasible solutions in order to improve the accounting for tangible fixed assets and its depreciation at Vietnam MultimediaCorporation.

Research Methodology

To conduct my research, I gathered both primary and secondary data through specific collection methods.

Secondary data is initially gathered due to its accessibility in existing documents In my research, I utilize secondary data from both internal and external sources Internal sources comprise various company documentation, including financial statements and accounting records, which are crucial for my analysis.

On the other hand, external resources are legal documents, data from internet, and others

To gather primary data, I employ two key methods: interviews and observations During my internship at Vietnam Multimedia Corporation, I conducted an interview with the Chief Accountant and also utilized email and telephone for additional interviews Furthermore, I closely observed the accountants' workflow, focusing on their data collection techniques and reporting methods to the management.

Following data collection, I engage in data processing, which encompasses analysis, comparison, and synthesis to evaluate and describe the accounting practices for tangible fixed assets within the company.

Research Scope

This study was carried out at Vietnam Multimedia Corporation, utilizing data sourced from the company's accounting records for the year 2015 The primary focus of the research was on the accounting practices related to tangible fixed assets and their depreciation within the corporation.

From Interview Báo cáo thực tập tổng hợp From Observation

THEORETICAL FRAMEWORK OF ACCOUNTING FOR

Tangible Fixed Assets and Its Depreciation

2.1.1 Definition of Tangible Fixed Assets and Its Depreciation

Tangible fixed assets play a crucial role in the operational activities of businesses To fully grasp their characteristics and the accounting practices associated with them, it's essential to first define what tangible fixed assets are According to Vietnamese Accounting Standard (VAS) No 03, tangible fixed assets are defined as

Tangible fixed assets refer to physical assets owned by businesses that are utilized in production and operational activities, aligning with the established criteria for recognition of such assets.

To qualify as tangible fixed assets, an asset must fulfill four essential recognition criteria: it must promise future economic benefits, have a reliably determined historical cost, possess an estimated useful life exceeding one year, and comply with all current valuation regulations.

Tangible fixed assets are a crucial part of total assets and significantly impact the financial health of businesses Accurately determining whether an asset qualifies as a tangible fixed asset or should be classified as a production or business expense is essential, as this decision greatly influences the reporting of an enterprise's operational performance and financial outcomes.

When assessing the initial criterion for tangible fixed assets, businesses must evaluate the certainty of acquiring future economic benefits based on available evidence at the time of recognition, while also considering all associated risks.

Though being unable to directly yield economic benefits like other tangible fixed assets, those assets used for the purposes of ensuring production and

Báo cáo thực tập tổng hợp business safety or protecting the environment are necessary for enterprises to achieve more economic benefits from other assets

The historical cost of tangible fixed assets is typically established through procurement, exchange, or self-construction, thereby satisfying the second criterion for their recognition.

When assessing tangible fixed assets, enterprises must evaluate each component individually They can aggregate secondary parts like molds, tools, and swages, applying the tangible fixed asset criteria to their total value Accessories and auxiliary equipment are typically classified as movable items and included in usage costs However, major accessories and maintenance equipment are recognized as tangible fixed assets if their useful life exceeds one year If these items are used sporadically with tangible fixed assets, they should be recorded as separate tangible fixed assets and depreciated over a shorter period than the related assets' useful life.

According to Vietnam Valuation Standard No 12, tangible fixed assets are physical assets owned by enterprises for production and trading purposes, as defined by the Ministry of Finance These assets participate multiple times in the production process, transferring part of their value to the final product while maintaining their physical form.

According to Circular No 45/2013/TT-BTC issued by the Ministry of Finance on April 25, 2013, tangible fixed assets are defined as physical means of labor that meet specific criteria These assets, which include buildings, structures, machinery, equipment, and transportation means, play a crucial role in various business cycles while maintaining their original physical forms.

Means of labor refer to tangible assets that consist of interconnected components working together to perform specific functions For an asset to be classified as a fixed asset, it must meet three criteria: it should be expected to generate future economic benefits, it must have a useful life exceeding one year, and its individual parts are essential for the system's operation.

Báo cáo thực tập tổng hợp c) Primary price of assets must be determined reliably, and is valued at 30,000,000 (thirty million) VND or more.

A system comprising multiple interconnected asset components can maintain its primary operational function even if individual components have varying utilization times or are removed However, due to management requirements for fixed assets, each asset division must be separately managed When each asset division meets three specific criteria, it qualifies as an independent tangible fixed asset.

For animals working and/or giving products, then each of the animals simultaneously satisfying three criteria of fixed assets is regarded as tangible fixed.

For perennial orchards, each piece of garden, or trees simultaneously satisfying three criteria shall be regarded as a fixed tangible asset.”

According to International Accounting Standards (IAS) No 16 - Property, Plant and Equipment: “Items of property, plant, and equipment should be recognised as assets when it is probable that:

- It is probable that the future economic benefits associated with the asset will flow to the entity, and

- the cost of the asset can be measured reliably.”

Tangible fixed assets, as defined by the Organisation for Economic Co-operation and Development, refer to non-financial produced assets that include dwellings, various buildings and structures, machinery, equipment, and cultivated assets.

Tangible fixed assets are defined by specific criteria that determine their classification Following this, we will explore the topic of depreciation associated with these tangible fixed assets.

2.1.1.2 Depreciation of Tangible Fixed Assets

Tangible fixed assets experience a decline in value during the production process due to external factors, leading to depreciation, which is recorded as an expense This depreciation can be defined in various ways, similar to how tangible fixed assets are categorized.

Depreciation is the systematic reduction of a fixed asset's recorded cost, applicable to items like buildings, furniture, and office equipment, while land is excluded due to its non-depleting nature This accounting practice aligns with the matching principle, ensuring that the costs of fixed assets are matched with the revenues they generate within the same reporting period As a result, depreciation leads to a gradual decrease in the carrying amount of fixed assets on the balance sheet, without affecting their market value Additionally, depreciation plays a crucial role in cash flow calculations, as it impacts net income while not representing an actual cash outflow, necessitating an add-back in cash flow analyses.

Accounting for Tangible Fixed Assets and Its Depreciation

2.2.1 Accounting for Tangible Fixed Assets

2.2.1.1 Accounting Documentation and Accounting Book

Main accounting documentation and accounting books for tangible fixed assets including:

- Minutes of hand-over of tangible fixed assets;

- Minutes of inspection of tangible fixed assets;

- Minutes of hand-over and inspection;

- Minutes of tangible fixed assets liquidation

According to Circular No 200/2014/TT-BTC dated December, 22 nd , 2014 of the Ministry of Finance, account 211 – Tangible fixed assets is applied The Circular No 200 also indicated that:

This account tracks the current costs and fluctuations in total tangible fixed assets of an enterprise based on their historical costs Tangible fixed assets refer to physical assets owned by an enterprise for operational purposes, adhering to specific recognition criteria These assets may consist of independent structures or interconnected components that function together; if any part is missing, the system cannot operate An asset is classified as a fixed asset when it meets all four recognition criteria.

- Future economic benefits will surely be obtained;

- Their historical cost has been determined reliably;

- Their useful life is at least 1 year;

- It meets all value criteria as prescribed in regulations in force.

In a system composed of distinct components, each with varying lifespans, the overall functionality remains intact even if one part is absent When each component is individually managed and fulfills all four recognition criteria, they qualify as independent tangible fixed assets.

Working animals and animals raised for commodity production can be classified as tangible fixed assets if they fulfill all four recognition criteria for fixed assets.

Perennial gardens and plants qualify as tangible fixed assets if they meet all four recognition criteria The costs associated with these tangible fixed assets should be recorded under account 211, reflecting their historical costs It is essential to maintain specific records of the historical costs for each fixed asset.

About the contents and structure of account 211 – Tangible fixed assets, the Circular No 200 presented as follows:

- An increase in historical cost of the tangible fixed asset due to completed constructions, purchase, receipt of capital contribution, grant, donation, present, or surplus;

- An increase in historical cost of the fixed assets after adjustment due to additional construction or equipment, or upgrade;

- An increase in historical cost of the fixed assets due to re-evaluation.

- An decrease in historical cost of the tangible fixed assets due to transfer to other enterprises, liquidation or contribution into joint venture, etc.

- A decrease in historical cost of the fixed asset due to dismantlement of one or several parts;

- A decrease in historical cost of the fixed asset due to re-evaluation.

Debit balance: Current historical costs of the fixed assets of the enterprise.

Account (Acc.) 211 – Tangible fixed assets comprises 6 sub-accounts:

- Acc 2113 – Means of transportation and transmitters

- Acc 2114 – Office equipment and furniture

- Acc 2115 – Perennial plants, working and producing animals

2.2.1.3 Accounting for the Increase of Tangible Fixed Assets

According to Circular No 200/2014/TT-BTC dated December, 22 nd , 2014 of the Ministry of Finance:

When acquiring a tangible fixed asset with deductible input VAT, it is essential to establish the historical cost based on the purchase documentation Proper accounting records and a receipt slip for the fixed asset must be prepared, and the relevant accounts should be accurately recorded.

Dr 211 – Tangible fixed assets (VAT-exclusive prices)

Cr 341 – Borrowings and finance lease liabilities (3411)

When the enterprise receives donated or presented tangible fixed assets for put in use, the following accounts shall be recorded:

Other directly-attributable expenses incurred from donated or presented tangible fixed assets shall be recorded to historical cost as follows:

When purchasing fixed assets which are buildings, structures associated with land use rights put into use , the following accounts shall be recorded:

Dr 211 – Tangible fixed assets (historical cost – buildings, structures in details).

Dr 213 – Intangible fixed assets (historical cost – land use rights).

Dr 133 – Deductible VAT (if any)

Figure 2.3: Accounting for Increase in Tangible Fixed Assets by Purchase

2.2.1.4 Accounting for the Decrease of Tangible Fixed Assets

Circular No 200/2014/TT-BTC dated December, 22 nd , 2014 of the Ministry of Finance presented the accounting for the decrease of tangible fixed assets as follows:

“ When selling fixed assets used for business , the following accounts shall be recorded:

Cr 711 - Other income (VAT-exclusive prices)

If the VAT is not separable, the other income shall include VAT A decrease in VAT payables shall be recorded to other income.

- A decrease in purchased fixed asset shall be recorded according to receipt slip of fixed asset:

Dr 214 - Depreciation of fixed assets (2141) (depreciated value)

Dr 811 - Other expenses (residual value)

Cr 211 - Tangible fixed assets (historical cost).

- Costs related to sale of fixed assets shall be recorded to Dr 811 “Other expenses”.

In case of selling fixed assets used for non-business activities:

- A decrease in sold fixed asset shall be recorded according to receipt slip of fixed asset as follows:

Dr 466 - Funds used for fixed asset acquisitions (residual value)

Dr 214 - Depreciation of fixed assets (depreciated value)

Cr 211 - Tangible fixed assets (historical cost).

- Revenues and expenses related to sale of the fixed asset shall be recorded to relevant accounts as prescribed in regulations of competent agency.

Identifying the causes of a shortage or surplus in tangible fixed assets is essential for effective asset management Accurate and timely documentation, as outlined in the "Report on Physical Inventory Count of Fixed Assets," is crucial for understanding these discrepancies Specifically, when there is a surplus of fixed assets, it is important to investigate and record the underlying reasons to ensure proper inventory control and financial reporting.

- If the surplus of fixed assets is detected due to unrecording, an increase in fixed assets shall be recorded according to dossier on fixed assets as follows:

When utilizing surplus fixed assets, it is essential to document the increase in tangible fixed assets Additionally, the depreciation value must be calculated and accounted for, including any deductions for additional depreciation related to the use of these assets for welfare, non-business, or project purposes.

Dr operating costs (fixed assets used for business)

Dr 3533 – Welfare funds used for fixed asset acquisitions (used for welfare)

Dr 466 – Non-business funds used for fixed asset acquisitions.

Cr 214 – Depreciation of fixed assets (2141).

Báo cáo thực tập tổng hợp b) Shortage of fixed assets: it is required to uncover reasons, offenders and handled as prescribed in financial regime in force

+ The shortage of fixed assets used for business shall be recorded as follows:

Dr 214 – Depreciation of fixed assets (depreciated value)

Dr 111, 112, 334, 138 (1388) (if the offender is required to make compensation)

Dr 411 – Owner‘s invested equity (if the decrease in equity is permitted to be recorded)

Dr 811 – Other expenses (if the enterprise suffers losses)

+ The shortage of fixed assets used for non-business activities shall be recorded as follows:

A decrease in the fixed asset shall be recorded as follows:

Dr 466 – Funds used for fixed asset acquisitions (residual value)

Cr 211 – Tangible fixed assets (historical cost).

The residual value of the shortage of fixed assets must be recovered according to the decision on handling of shortage and the following accounts shall be recorded:

Dr 334 – Payables to employees (deducted from salaries of employees)

Cr relevant accounts (according to report on handling).

+ The shortage of fixed assets used for culture or activities welfare shall be recorded as follows:

A decrease in the fixed asset shall be recorded as follows:

Dr 3533 – Funds used for fixed asset acquisitions (residual value)

Cr 211 – Tangible fixed assets (historical cost).

The residual value of the shortage of fixed assets must be recovered according to the decision on handling of shortage and the following accounts shall be recorded:

Dr 334 – Payables to employees (deducted from salaries of employees)

Figure 2.4: Accounting for Decrease in Tangible Fixed Assets by Liquidation,

2.2.1.5 Accounting for the Repair, Disposal of Tangible Fixed Assets

Circular No 45/2013/TT-BTC dated April, 25 th , 2013 of the Ministry of Finance indicated about several fluctuation cases of tangible fixed assets:

“ Article 7 Investment, upgrade and repair of fixed assets:

1 The costs which enterprises have paid for upgrade of fixed assets are reflected by an increase in primary price of such fixed assets These costs must not be recorded into the cost of business and productions in the period.

2 The repair costs of fixed assets must not be calculated by an increase in primary price of fixed assets but are recorded directly or amortized into the business cost in the period, but not exceeding 3 years maximally.

Article 8 Leasing, pledging, mortgaging, sale or disposal:

All activities of leasing, pledging, mortgaging, sale or disposal of fixed assets must comply with current regulations of law.”

According to Vietnamese Accounting Standard (VAS) No 03, issued with Decision No 149/2001/QĐ-BTC on December 31, 2001, the sale or liquidation of tangible fixed assets must be recorded as a decrease in assets The profits or losses from such transactions are calculated by subtracting the costs of liquidation or sale, along with the residual value of the assets, from the income generated These resulting profits or losses are then recognized as either income or expense in the business results report for the relevant period.

International Accounting Standards (IAS) No 16 outlines the derecognition of Property, Plant, and Equipment, stating that an asset must be removed from the financial statement upon disposal or when it is no longer in use and expected to generate future economic benefits The gain or loss from this disposal is determined by the difference between the proceeds received and the asset's carrying amount, and it should be recognized in the profit and loss statement.

2.2.2 Accounting for Depreciation of Tangible Fixed Assets

2.2.2.1 Depreciation Methods of Tangible Fixed Assets

According to Vietnamese Accounting Standard – VAS No 03 about tangible fixed assets: “Three methods of depreciation of tangible fixed assets are:

- Declining-balance depreciation method; and

- Units-of-output depreciation method.

The straight-line depreciation method maintains a consistent annual depreciation amount over the asset's useful life, while the declining-balance method results in a decreasing annual depreciation amount Alternatively, the units-of-output depreciation method calculates depreciation based on the estimated total output of product units from the assets It is essential for enterprises to select the appropriate depreciation method for each tangible fixed asset.

The comprehensive internship report was consistently implemented, with adjustments made only when there were changes in its application Companies are prohibited from continuing to depreciate tangible fixed assets that have been fully depreciated yet remain in use for production and business activities.

According to Circular No 45/2013/TT-BTC issued by the Ministry of Finance on April 25, 2013, there are three methods of depreciation: the straight-line depreciation method, the adjusted reducing balance method, and the depreciation method based on volume.

Enterprises can select a suitable depreciation method for their fixed assets based on the specific conditions applicable to each method One common approach is the straight-line depreciation method, which allocates a consistent annual rate to the business and production costs associated with the fixed assets used in operations.

- Determining the annual depreciation for the fixed assets by the following formula:

Annual depreciation = Cost of fixed assets

- Monthly depreciation equal to the yearly depreciation divided by 12 months. b) Adjusted reducing balance method:

THE CURRENT SITUATIONS OF ACCOUNTING FOR

Overview of Vietnam Multimedia Corporation

 Trading name: Vietnam Multimedia Corporation

 Company type: One Member Limited Liability Company

 Vietnamese title: Tổng Công ty Truyền thông Đa phương tiện Việt Nam

 Address: 16 th – 17 th Floor, VTC Building, 23 Lac Trung St., Hai Ba Trung District, Hanoi, Vietnam

 Website: http://vtc.org.vn/

The Vietnam Multimedia Corporation (VTC Corporation) originated as the Service Factory of Repair and Warranty for Broadcasting Equipment, established on February 12, 1988, by the Ministry of Information's Decision No 33/QĐ-BTT On March 25, 1993, it was restructured into the Information Technique Development and Investment Company (Intedico) under the Minister of Culture and Information's Decision No 288/QĐ.

In December 1996, the Vietnam Television Technology Investment and Development Company (VTC) was formed through the merger of Ratimex and Telexim, becoming part of the Intedico Company and operating under Vietnam Television.

On June 26, 2003, the Prime Minister issued Decision No 129/2003/QĐ-TTg, which facilitated the transfer of the Vietnam Television Technology Investment and Development Company (VTC) from Vietnam Television to the Ministry of Posts and Telematics.

VTC Corporation marked a significant milestone in its evolution as a leading logistics provider in Vietnam's television sector The company focused on researching, developing, manufacturing, and supplying equipment essential for television program production, capturing a substantial market share VTC's efforts expanded television coverage nationwide, ensuring that the Party and State's guidelines reached remote, border, and island communities, thereby enhancing public awareness and cultural life Additionally, VTC pioneered the application of science and technology by researching, consulting, and transferring technology, which improved the production capacity and quality of digital television broadcasting across the country.

On July 29, 2005, the Prime Minister approved Decision No 192/2005/QD-TTg, which allowed Vietnam Television Technology Investment and Development Company to transform into Vietnam Multimedia Corporation, operating under a mother-son model.

On June 28, 2010, the Ministry of Information and Communications (MIC) issued Decision No 929/QĐ-BTTTT, transforming VTC Corporation into a One Member Limited Liability Company, a state-owned entity This change was further solidified by Decision No 1944/QĐ-BTTTT on December 14.

In 2010, the Ministry of Information and Communications (MIC) approved the Charter of Organization and Operation for VTC Corporation Since then, VTC Corporation has engaged in various sectors, including communication, journalism, television, telecommunications, and information technology.

On October 16, 2013, the Prime Minister enacted Decree No 132, which facilitated the transfer of VTC Digital Television from VTC Corporation to the Ministry of Information and Communications (MIC) VTC Corporation continues to concentrate on key sectors, including Digital Content, Telecommunication Services, Television Services, and Information Technology.

VTC Corporation has been honored with numerous prestigious awards by the Party and the State, including three titles of "Hero of Labor in the Innovation Period" for two collectives and one individual Additionally, the company has received a Second-class Independence Order and a total of 20 Labor Orders, encompassing both First-class and Second-class distinctions.

Third-class Orders), many other awards, and titles from the Government and the Ministry of Information and Communications.

3.1.2 Business Operation and Organizational Structure

VTC Corporation, a wholly state-owned enterprise under the Ministry of Information and Communications, operates independently in various fields, including Communication, Journalism, Television, Digital Content, Telecommunication, and Information Technology With a focus on becoming a leading provider of digital content services supported by a robust multimedia infrastructure, VTC prioritizes information and entertainment services while aiming to expand its business both domestically and internationally The corporation's operations are guided by Decision No 1944/QĐ-BTTTT, which outlines its organizational charter VTC's business strategy centers on three key sectors: Information Technology and Digital Content, Television, and Telecommunication, with a particular emphasis on Digital Content services The company’s growth is structured in two phases: a recovery phase ending in 2016 and a development phase starting in 2017, with plans for future equitization The organizational structure delineates the functions and responsibilities of each department, ensuring effective operation and management.

 Investment Department purchases fixed assets This department has a sub- department which is called Legislation department

 Finance and Planning Department is responsible for finance, accounting and planning that will be shown in more detail in part 3.1.4.

 Personnel and Salary Department is responsible for construction, salary, and social insurance,…

 Corporate Office manages the building and security,…

 Copyright Center is in charge of communication and events of the corporation.

 Research Center is responsible for software research and new technology.

 Project Management Department is in charge of constructing the building.

 Korean Official Development Assistance (ODA) Project Management Department implements the “Multimedia Center” Project.

Figure 3.6: Organizational Structure of VTC Corporation

VTC Corporation comprises various member units categorized into three types: Subsidiaries, One Member Limited Liability Companies, and Joint Stock Companies The Subsidiaries include VTC Intecom, VTC Digital, and VTC Media One Member Limited Liability Companies, fully owned by VTC Corporation, are VTC Digicom and VTC Comtech Additionally, the Joint Stock Companies, in which VTC Corporation holds over 51% of the legal capital, consist of VTC Mobile, VTC EAC, and NetViet.

3.1.3 Financial Position and Operational Results

This analysis examines the financial position and business performance of Vietnam Multimedia Corporation (VTC) during 2013, 2014, and 2015, highlighting significant changes, particularly in 2014 The company's organizational structure underwent a major transformation as VTC Digital Television became a unit under the Ministry of Information and Communications Furthermore, VTC continued to implement its restructuring scheme for 2012-2015, as approved by Decision No 28/QĐ-BTTTT on January 11, 2013 This restructuring included merging two subsidiaries into a single member limited liability company, divesting from two joint stock companies, and dissolving seven dependent accounting units that were primarily operating inefficiently.

Table 3.2: Financial Position of VTC Corporation Through Years

Owners’ Capital 1,078,727Báo cáo thực tập tổng hợp921,363 703,251 157,364 17.08 218,112 31.015

(Sourse: http://vtc.org.vn/thong-tin-cong-bo-post.htm - Financial Statements of VTC Corporation)

Table 3.3: Operational Results of VTC Corporation Through Years

The financial position and operational results of Vietnam Multimedia Corporation from 2013 to 2015 reveal significant fluctuations in key items Notably, owners' capital surged by 17.08% (157,364 million VND) between 2014 and 2015, while cash and cash equivalents rose dramatically from 94,126 million VND to 156,826 million VND, marking an increase of 66.613% during the 2013-2014 period Additionally, long-term liabilities increased by 37.537% (126,128 million VND) from 2013 to 2014 In terms of revenue and profit, the company experienced a revenue increase from 3,200 billion VND to 3,350 billion VND (4.688%) between 2014 and 2015, alongside a profit rise of 45 billion VND (58.442%) However, revenue had previously decreased by 3.990% (133 billion VND) from 2013 to 2014, despite profit growing from 61 billion VND to 77 billion VND, reflecting a 26.230% increase (16 billion VND).

Between 2013 and 2015, VTC Corporation underwent a significant restructuring in response to Decision No 28/QĐ-BTTTT issued by the Ministry of Information and Communications (MIC) on January 11, 2013, and the subsequent implementation of Decree No 132/NĐ-CP on October 16, 2013.

In 2013, the Government initiated the transfer of VTC Digital Television from VTC Corporation to the Ministry of Information and Communications (MIC) The initial outcomes demonstrated that this reorganization was effective, as evidenced by the positive operational results achieved by the corporation from 2013 to 2015.

Current Situation of Accounting for Tangible Fixed Assets and Its Depreciation

This section provides a comprehensive overview of the accounting practices for tangible fixed assets at Vietnam Multimedia Corporation It outlines the procedures, necessary documentation, and the recording processes involved in both the acquisition and disposal of assets, as well as the depreciation and repair activities for the year 2015 Specific examples will illustrate the various cases of asset increases at the corporation, as detailed in section 3.2.2.

Tangible fixed assets are acquired externally and utilized in production and business operations These assets encompass both purchased items that are not stored in a warehouse and those that are initially placed in a warehouse before being designated as fixed assets.

+ Tangible fixed assets are received from member units of VTC Corporation;

+ Tangible fixed assets are increased due to completion of capital investment or project;

+ Other cases (donated tangible fixed assets, surplus tangible fixed assets,…)

The cases of decreasing tangible fixed assets at Vietnam Multimedia Corporation are as follows:

+ Tangible fixed assets are transferred to member units of VTC Corporation;

+ Tangible fixed assets are transferred to internal units of VTC Corporation for management and use;

+ Tangible fixed assets are liquidated;

+ Other cases (assets are transformed into tools, lost assets,…).

Examples for cases of fluctuation of tangible fixed assets at VTC Corporation in 2015 are as follows:

- Increase: the company purchased a new photocopier Ricoh MP 3053; purchased modulator DVB-T2;…

The company has liquidated its broadcasting column at 65 Lac Trung, Hanoi, in accordance with Decision 350/QĐ-VTC Additionally, it has transferred the property and equipment of the Uplink station to VTC Digital Company, following Decision 225/QĐ-VTC.

This article focuses on two key examples of fluctuations in tangible fixed assets: the increase due to purchases and the decrease resulting from liquidation.

3.3.1 Detailed Accounting for Tangible Fixed Assets

3.3.1.1 Accounting Documentation and Procedures for the Increase of

+ Minutes of Hand-over and Inspection

In 2015, VTC Corporation initiated the procurement of a new photocopier to meet office needs, leading to the development of an investment and procurement plan approved by management Following this, a purchase request was prepared and validated by the FPD, receiving final approval from the General Director Given the photocopier's value exceeding 50 million VND, the Investment Department managed the procurement process, soliciting quotes from at least three independent suppliers After evaluating the quotations, VTC Corporation selected the Ricoh MP 3053 from Sieu Thanh Corporation, which offered the lowest price, with the General Director approving this decision on July 20, 2015 A sales contract was signed on July 22, 2015, and Sieu Thanh Corporation subsequently issued a VAT invoice The transaction concluded with both parties preparing a hand-over and inspection report for the photocopier, accompanied by relevant accounting documentation.

Figure 3.10: Quotation of Sieu Thanh Corporation

591 Lac Long Quan, Xuan La Ward, Tay Ho

We are honored to send you the quotation for photocopier RICOH and the following information:

Photocopier Ricoh MP3053 Including: Ink, Developer, Automatic

Reversing Document Feeder DF3090, Steel foot shelf.

Continuous copying speed: 30 copies/minute

Paper size (min-max): A6 – A3 Quantity indicator: up to 999 Copy resolution: 600 x 600 dpi RAM: 512 MB

Note: If you use Sieu Thanh services, we will provide the lifetime free maintenance for your product If not, we will provide the free maintenance within 24 months.

Figure 3.11: Proposal for Purchase Photocopier

SOCIALIST REPUBLIC OF VIETNAM Independence – Freedom – Happiness

PROPOSAL For purchase photocopier at 16 th floor of the company

Dear: The General Director of Vietnam Multimedia Corporation

Currently, the office are hiring 01 photocopier to serve for departments at 17 th floor; and 01 old photocopier of the company at 16 th floor is frequently broken.

To meet the demands of the office on the 16th floor for quick photocopying of documents, texts, and reports, we respectfully request the General Director's approval for the purchase of a high-speed photocopier.

01 new photocopier with following features:

2-sided photocopy; multicolor touchscreen; A3, A4 paper tray; photocopy speed

The office propose to purchase photocopier Ricoh MP3053 of Sieu Thanh Corporation because of service quality and lifetime free maintenance for product. Total: 66,600,000 VND

(By letter: Sixty six million and six hundred thousand Vietnam Dong)

The Finance and Planning Department conducts the price appraisal before purchasing.

The office respectfully propose to the General Director for review and approval Sincerely!

(sign, full name) (sign, full name)

Figure 3.12: Sales Contract for Purchase Office Equipment

SALES CONTRACT FOR PURCHASE OFFICE EQUIPMENT

- Based on the Civil Law No 33/2005/QH11 dated June, 14 th , 2005 by the National Assembly.

- Based on the Commercial Law No 36/2005/QH11 dated June, 14 th , 2005 by the National Assembly.

- Based on ability and demand of two parties.

Today, July, 22 nd , 2015, two parties include:

PARTY A (Buyer): VIETNAM MULTIMEDIA CORPORATION

Address: 67B, Ham Long, Hang Bai Ward, Hoan Kiem District, Hanoi

Representative: Mr DAM MY NGHIEP

Bank account (VND): 1500311000036 at Agribank Ha Noi

PARTY B (Seller): SIEU THANH CORPORATION (HANOI BRANCH)

Address: 591 Lac Long Quan, Xuan La Ward, Tay Ho District, Hanoi

Representative: Mr NGUYEN VAN THINH

Bank account (VND): 0000.7900.1888 at PVcomBank (Thang Long Branch)

After discussing, two parties agreed with the following contents:

No LIST OF GOODS UNIT QUANTITY UNIT

Automatic Reversing Document Feeder DF3090

Continuous copying speed: 30 copies/minute

By letter: Sixty six million and six hundred thousand Vietnam Dong.

- Delivery time: within 10 days after signing this contract.

- Warranty: lifetime free maintenance for the product

Party A pays 100% value (66,600,000 VND) to party B after receiving the photocopier Then, party B sends VAT invoice to party A

ARTICLE IV: OBLIGATIONS OF PARTY A

- Responsible for receiving the photocopier;

- Conduct the payment accordance with the agreement;

- Other obligations of buyer according to provisions of law

- Provide the photocopier with right quality and technical features as agreed and committed;

- Responsible for maintenance and warranty;

- Provide information and documents related to the photocopier for party A;

- Other obligations of seller according to provisions of law

- All changes and additional contents of this contract are only valid when two parties discuss together and agree in writing;

- Two parties are committed to comply with all agreed contents;

- The contract takes effect from the date of signing with four (04) equal validity copies Each party keeps two (02) copies.

(sign, full name) Báo cáo thực tập tổng hợp (sign, full name)

591 Lac Long Quan, Xuan La Ward, Tay Ho

No Item code Description Unit Quantity Unit price Total

Automatic Reversing Document Feeder DF3090

Sixty six million and six hundred thousand Vietnam Dong.

(sign, full name) (sign, full name) (sign, full name)

Figure 3.14: Minutes of Hand-over and Inspection

MINUTES OF HAND-OVER AND INSPECTION

Based on the sales contract No 22072015/HD/DS/HN/15 dated July, 22 nd , 2015

Today, July, 24 th , 2015, two parties include:

PARTY B: SIEU THANH CORPORATION (HANOI BRANCH)

Address: 591 Lac Long Quan, Xuan La Ward, Tay Ho District, Hanoi

Two parties signed the minutes of hand-over and inspection:

1.1 01 Photocopier Ricoh MP 3053 – Serial: E 754 HB 50296

1.2 01 Automatic reversing document feeder DF3090 – Serial: E 934 QC 11978

1.3 01 Ink, 01 Developer, 01 Steel foot shelf, 01 VAT invoice, 01 Warranty card, 01

At 16 th floor, 23 Lac Trung, Vinh Tuy Ward, Hai Ba Trung District, Hanoi.

Machinery status: 100% new photocopier Party B is responsible for installation, operation and manuals for party A.

2 Two parties do not have any recommendations about the machinery status.

3 The minutes has been read again Two parties have tracked together.

4 The minutes is made in 02 copies Each party keeps 01 equal validity copy.

REPRESENTATIVE OF PARTY A REPRESENTATIVE OF PARTY B

3.3.1.2 Accounting Documentation and Procedures for the Decrease of

+ Decision of Establishing Fixed Assets Liquidation Council

+ Minutes of Evaluation of Fixed Assets Status

+ Decision of Fixed Assets Liquidation

+ Minutes of Fixed Assets Liquidation

+ Minutes of Liquidated Fixed Assets Hand-over

On June 13, 2015, a broadcasting column in Lac Trung, Hanoi, was damaged by a storm, prompting the Fixed Assets Department (FPD) to propose the liquidation of the asset The General Director approved the establishment of a liquidation council, which evaluated the asset's status and prepared the necessary documentation for liquidation The broadcasting column had a historical cost and accumulated depreciation of 84,000,000 VND, resulting in a residual value of 0 VND VTC Corporation announced the asset's liquidation to external investors and selected the highest bidder, Duy Linh Construction Trading Company Limited, who purchased the asset for 15,000,000 VND (excluding 10% VAT) on September 10, 2015 Subsequently, an invoice was issued, and both parties signed the handover minutes for the liquidated asset.

Figure 3.15: Proposal of Liquidating Fixed Assets

PROPOSAL For liquidation of broadcasting column located in Lac Trung - Hanoi

Dear: The General Director of Vietnam Multimedia Corporation

On June, 13 rd , 2015, the broadcasting column located in Lac Trung - Hanoi was damaged by storm

Based on the observation and evaluation about the status of the broadcasting column, it was concluded that the broadcasting column wasseriously damaged and could not be used anymore.

The broadcasting column located in Lac Trung – Hanoi has historical cost of 84,000,000 VND.

Therefore, Finance and Planning Department propose to liquidate this broadcasting column The department respectfully propose to the General Director for review and approval

GENERAL DIRECTOR FINANCE AND PLANNING

Figure 3.16: Decision of Fixed Assets Liquidation

DECISION For liquidation of broadcasting column located in Lac Trung – Hanoi

- Based on the company's charter of Vietnam Multimedia Corporation.

- Based on the proposal for liquidation of broadcasting column located in Lac Trung – Hanoi which was approved by the General Director on July, 25 th ,

- Based on the minutes of evaluation of fixed assets status dated July, 28 th , 2015.

DECISION ARTICLE I: LIQUIDATION OF ASSETS

Asset: The broadcasting column located in Lac Trung – Hanoi

ARTICLE II: MINUTES OF FIXED ASSETS LIQUIDATION

The Liquidation Council prepares minutes for the liquidation of fixed assets, creating two copies: one for the Finance and Planning Department and another for the Accounting Department.

Liquidation Council and related departments are responsible for the implementation of this decision

Figure 3.17: Minutes of Fixed Assets Liquidation

23 Lac Trung St., Hai Ba Trung District, Hanoi

No 200/2014/TT-BTC dated 22/12/2014 of the Ministry of

MINUTES OF FIXED ASSETS LIQUIDATION

Based on the Decision for liquidation of broadcasting column located in Lac Trung – Hanoi which was approved by the General Director of Vietnam Multimedia Corporation dated August, 15 th , 2015.

I Fixed assets liquidation Council include:

Mr Dam My Nghiep General Director Chairman of Liquidation Council

Mr Hoang Le Son Chief Accountant Member

Mrs Nguyen Thi Nhung Head of FPD Member

II Implementation of fixed assets liquidation

Fixed asset:The broadcasting column located in Lac Trung – Hanoi

Accumulated depreciation by the time of liquidation: 84,000,000 VND

III Conclusion of fixed assets liquidation Council

Fixed assets liquidation Council decides to liquidate the broadcasting column located in Lac Trung – Hanoi because it was seriously damaged and could not be used anymore

IV Results of fixed assets liquidation

Fixed assets liquidation expenses: 0 VND (By letter: Zero Vietnam Dong)

Recoverable value: 15,000,000 VND (By letter: Fifteen million Vietnam Dong)

Copy 2: Customer September, 10 th , 2015 Customer: Duy Linh Construction Trading Company Limited

Address:275 Van Quan Residential Area, Ha Dong District, Hanoi

Address:23 Lac Trung, Hai Ba Trung District, Hanoi

No Description Unit Quantity Unit price Total

Liquidation of broadcasting column located in Lac Trung –

By letter: Sixteen million and five hundred thousand Vietnam Dong.

Figure 3.19: Minutes of Liquidated Fixed Assets Hand-over

MINUTES OF LIQUIDATED BROADCASTING COLUMN HAND-OVER

Today, September, 15 th , 2015, two parties include:

Representative: Mr Dam My Nghiep Position: General Director

Address: 23 Lac Trung, Hai Ba Trung District, Hanoi

PARTY B: Duy Linh Construction Trading Company Limited

Representative: Mrs Doan Thi Men Position: Director

Address: 275 Van Quan Residential Area, Ha Dong District, Hanoi

Party A and party B agreed to sign the minutes of liquidated assets hand-over with the following contents:

The broadcasting column after dismantlement for liquidation was checked under the witness of party A and party B

Two parties agreed to receive and hand over the liquidated broadcasting column

The minutes is made in 02 copies Each party keeps 01 equal validity copy The minutes takes effect from signing date.

REPRESENTATIVE OF PARTY A REPRESENTATIVE OF PARTY B

3.3.1.3 Recording Process of Accounting Book for the Increase of Tangible

VTC Corporation recently acquired a Ricoh MP 3053 photocopier for the office on the 16th floor to enhance operational efficiency Following the purchase, all related documents and vouchers are forwarded to the Accounting Department for proper record-keeping The company utilizes Bravo 7 accounting software for computerized accounting, maintaining various records such as fixed asset cards, fixed asset books, detailed asset records, and a summary table of fixed assets.

Figure 3.20: Fixed Asset Card (Photocopier Ricoh MP3053)

67B Ham Long, Hang Bai Ward, Hoan Kiem District, Hanoi

Based on the Minutes of hand-over and inspection on July, 24 th , 2015

Place of use: Corporate Office – Vietnam Multimedia Corporation

Historical cost of fixed asset Depreciation

Time to start using Description Historical cost Year Depreciation Accumulation

Prepared by Chief Accountant General Director

Figure 3.21: Fixed Asset Book (Photocopier Ricoh MP3053)

67B Ham Long, Hang Bai Ward, Hoan

Year 2015 Account: 211 – Tangible Fixed Assets

(Issued according to Circular No.

200/2014/TT-BTC dated 22/12/2014 of the

Record the increase of fixed assets Depreciation Note

Time to start using Code Historical cost

Number of month used Accumulation Voucher Decreased reason of fixed asset

(sign, full name) Báo cáo thực tập tổng hợp (sign, full name) (sign, full name)

Figure 3.22: Fixed Asset Detailed Book (Photocopier Ricoh MP3053)

Explanation Reciprocal account Debit Credit Balance

03/08/15 CN203 Purchase of photocopier Ricoh

(sign, full name) Báo cáo thực tập tổng hợp (sign, full name) (sign, full name)

Figure 3.23: Summary Table of Fixed Assets (Photocopier Ricoh MP3053)

SUMMARY TABLE OF FIXED ASSETS

Name of tangible fixed assets

Number of month for depreciation

Beginning Depreciation during the period

3.3.1.4 Recording Process of Accounting Book for the Decrease of Tangible

VTC Corporation has opted to liquidate its broadcasting column in Lac Trung, Hanoi, due to severe storm damage rendering it unusable Following the liquidation, all related documents and vouchers will be submitted to the Accounting Department for proper record-keeping The accounting process utilizes Bravo 7 accounting software, encompassing various records such as the fixed asset card, fixed asset book, detailed fixed asset book, and a summary table of fixed assets.

Figure 3.24: Fixed Asset Card (Broadcasting Column)

Based on the Minutes of fixed assets liquidation on September, 10 th , 2015

Asset: Broadcasting column located in Lac Trung – Hanoi

Place of use: Vietnam Multimedia Corporation

Suspended date: September, 10 th , 2015 – Reason for suspension: Liquidation

Historical cost of fixed asset Depreciation

Time to start using Description Historical cost Year Depreciation Accumulation

Broadcasting column located in Lac Trung – Hanoi

Figure 3.25: Fixed Asset Book (Broadcasting Column)

67B Ham Long, Hang Bai Ward,

Year 2015 Account: 211 – Tangible Fixed Assets

(Issued according to Circular No 200/2014/TT- BTC dated 22/12/2014 of the Ministry of

Record the increase of fixed assets Depreciation Note

Number of month used Accumulation

Voucher Decreased reason of fixed asset

Broadcasting column located in Lac Trung – Hanoi

Figure 3.26: Fixed Asset Detailed Book (Broadcasting Column)

Explanation Reciprocal account Debit Credit Balance

Liquidation of broadcasting column located in Lac Trung – Hanoi

Figure 3.27: Summary Table of Fixed Asset (Broadcasting Column)

Code Name of tangible fixed assets Unit Depreciation start date

Ending Historical No cost Accumulated depreciation Residual value Historical cost Accumulated depreciation Residual value

Broadcasting column located in Lac Trung -

3.3.2 General Accounting for Tangible Fixed Assets

3.3.2.1 General Accounting for the Fluctuation of Tangible Fixed Assets

According to the Circular No 200, account 211 – Tangible fixed assets is used In the company, following sub-accounts are applied:

+ Acc 2113 – Means of transportation and transmitters

+ Acc 2114 – Office equipment and furniture

Other accounts are also used in this case such as 331, 214, 111, 133, and others.

The recording process at VTC Corporation utilizes Bravo 7 accounting software alongside a general journal format, as illustrated in Figure 3.3 While the software does not capture the entire recording process, it effectively prints all necessary accounting books and financial statements in compliance with regulations Transactions are recorded in the general journal based on relevant documentation and vouchers, and subsequently, this data is transferred to the ledger after verification The recorded information serves as a foundation for preparing accurate financial statements, with examples of the general journal and ledger provided in sections 3.3.1.1 and 3.3.1.2.

Description Recorded in ledger Line Debit account Credit account Debit Credit

Accumulated number at the end of the previous page 671,858,853 671,858,853

03/08/15 CN203 03/08/15 Purchase of photocopier Ricoh MP 3053 

10/09/15 TSCD.010 10/09/15 Liquidation of broadcasting column located at

65 Lac Trung – Hanoi according to Decision

Year 2015 Account 211 – Tangible Fixed Assets

Description General journal Reciprocal account

No Date Page Line Debit Credit

03/08/15 CN203 03/08/15 Purchase of photocopier Ricoh MP 3053 33111011 60,545,455

10/09/15 TSCD.010 10/09/15 Liquidation of broadcasting column located at 65

Lac Trung – Hanoi according to Decision 350/QĐ-

+ Purchase of photocopier Ricoh MP 3053:

+ Liquidation of the broadcasting column located in Lac Trung – Hanoi:

3.3.2.2 General Accounting for the Depreciation of Tangible Fixed Assets

Vietnam Multimedia Corporation utilizes the straight-line depreciation method for calculating the depreciation of its tangible fixed assets, determining the annual depreciation amount based on this approach.

Annual depreciation = Cost of fixed assets

Useful lives and the monthly depreciation as:

When the purchased fixed assets are used immediately, the amount of depreciation in month of assets is:

Amount of depreciation in month

Monthly depreciation x Number of day used in month Number of day in month

Number of day used in month = Number of day in month - Day started to use + 1

Formula for calculation of depreciation in the period:

Depreciation in period (N) = Depreciation in previous period (N-1) +

Increased depreciation in period (N) – Decreased depreciation in period (N)

Account 2141, a sub-account of account 214, is utilized for tracking the depreciation of tangible fixed assets within a company The debit entries reflect reductions in depreciation when tangible fixed assets are liquidated or transferred to other company members, while credit entries indicate increases in depreciation as these assets are depreciated over time The debit balance represents the accumulated depreciation of the company's existing tangible fixed assets.

Other accounts are also used in this case such as:

6274 - Fixed asset depreciation (Factory overheads)

6414 - Fixed asset depreciation (General administration expenses)

Accounting documentation and accounting books:

+ Summary Table of Fixed Asset (Figure 3.18 and Figure 3.22)

Each month, the accountant calculates and allocates depreciation for fixed assets, ensuring that this data is accurately recorded in the detailed books and ledgers by the end of the month The following figures provide an in-depth look at the accounting documentation and records related to the depreciation of tangible fixed assets at VTC Corporation.

Figure 3.30: Depreciation Allocation Table DEPRECIATION ALLOCATION TABLE

Debit account Name of debit account Credit account Name of credit account Depreciation value

627401 Fixed asset depreciation – VTC 2141011 Depreciation of housing and structures – VTC 652,744,965

627401 Fixed asset depreciation – VTC 2141012 Depreciation of machinery and equipment – VTC 1,375,245,121

642401 Fixed asset depreciation – VTC 2141011 Depreciation of housing and structures – VTC 4,939,424,755

642401 Fixed asset depreciation – VTC 2141012 Depreciation of machinery and equipment – VTC 7,425,870,241

642401 Fixed asset depreciation – VTC 2141013 Depreciation of means of transportation – VTC 212,652,830

642401 Fixed asset depreciation – VTC 2141014 Depreciation of equipment and management tools –

Year 2015 Account 214 - Depreciation of Fixed Assets

Description Reciprocal account Debit Credit

Transfer of property and equipment of Uplink station to VTC Digital company according to Decision 225/QĐ-VTC

Liquidation of the broadcasting column located at 65 Lac Trung – Hanoi according to Decision 350/QĐ-VTC

Year 2015 Account 214 – Depreciation of Fixed Assets

Description General journal Reciprocal account

No Date Page Line Debit Credit

DISCUSSION AND RECOMMENDATIONS FOR IMPROVING

Remarks on Current Situation of Accounting for Tangible Fixed Assets and Its

4.1 Remarks on Current Situation of Accounting for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation

Fixed assets are crucial for business operations, serving as essential facilities for production and overall business activities Their effective management leads to increased labor productivity and economic growth Consequently, it is vital to enhance the accounting practices for tangible fixed assets within companies Upon examining the accounting methods for tangible fixed assets at VTC Corporation, I identified several advantages and disadvantages that warrant attention.

4.1.1 Advantages of Accounting for Tangible Fixed Assets and Its

VTC Corporation, as the parent company, oversees complex responsibilities that highlight the importance of its organizational structure, particularly within the accounting department This department benefits from a skilled and professional workforce, exemplified by Chief Accountant Mr Hoang Le Son, who holds a doctorate in business administration and possesses extensive experience in financial management His background includes leadership roles in major digital television companies The accounting department consistently delivers accurate and timely data, enabling company managers to implement effective strategies to improve business performance The combination of qualified personnel and efficient accounting practices, especially regarding tangible fixed assets, significantly enhances operational effectiveness at VTC Corporation.

Investment, procurement, and management of tangible fixed assets:

VTC Corporation effectively tracks and manages its tangible fixed assets, ensuring informed procurement decisions that support all departments while liquidating unusable assets The company prioritizes modern working facilities and machinery, including host systems and network equipment for projects like "The National Humanitarian Portal 1400." This strategic investment aligns with VTC's core business sectors, which include television services, digital content, telecommunications, and public communication Additionally, timely maintenance and repairs of fixed assets are conducted to support the company's operational needs.

VTC Corporation adheres to the Accounting Law, Accounting Standards, and Accounting Policies set by relevant authorities Since 2015, the company has implemented Circular No 200/2014/TT-BTC from the Ministry of Finance, which provides guidelines for enterprise accounting policies Additionally, VTC Corporation follows VAS No 03 and Circular No 45/2013/TT-BTC for the accounting and depreciation of tangible fixed assets The company's accounting system aligns with the Ministry of Finance's regulations, ensuring proper tracking of the acquisition, disposal, and depreciation of tangible fixed assets.

VTC Corporation has implemented its own regulations regarding the purchase, management, and use of assets and equipment, as outlined in Decision No 641/QĐ-VTC issued by the General Director on August 29, 2012 These regulations serve as a comprehensive guide for all departments, ensuring that procedures and responsibilities related to fixed assets comply with legal requirements while aligning with the company's organizational structure.

VTC Corporation utilizes the latest version of Bravo 7 accounting software from BRAVO Software Joint Stock Company, which incorporates several advanced features This software significantly enhances VTC Corporation's management capabilities and problem-solving efficiency, particularly in tracking, managing, and depreciating its substantial tangible fixed assets.

Báo cáo thực tập tổng hợp become more and more convenient when company uses Bravo 7 accounting software

Figure 4.33: Asset Management on BRAVO 7 Software

“Main features of BRAVO 7 software in asset management:

- Make and print assets note in detail.

- Create and print a card of accepting asset changes (Transferring to another departments, asset appreciation and depreciation, changing the purpose of using assets etc.) Asset Liquidation.

- Create and provide quick warning screen about condition of the asset (such as fixed assets awaiting for liquidation,…).

- Monitor assets displacement under group, capital resource accumulation, section, purpose for use, manager, etc.

- Monitor assets displacement (extra installment, removal, deduction, depreciation, liquidation, etc.) in using terms.

- Monitor times for delivery, value of expense allocation.

- Manage and calculate depreciation plan of fixed asset per year.

- Automatically calculate and account fixed assets depreciation under capital resource Calculate depreciation in straight line and descend.

- Print reports: Asset Book, summary of asset, asset book in detailed, depreciation calculation table, decrease/increase asset, asset checking report.

- Report scheduled maintenance, maintenance of equipment and machinery in the period Warning on the dashboard screen schedule periodic maintenance of each machine and equipment.”

Encryption of tangible fixed assets:

VTC Corporation employs a systematic coding method for its tangible fixed assets to enhance tracking and management efficiency Each asset is assigned a unique identification number in the format of 01.xxx, where 'xxx' indicates the order of its deployment within the company This consistent coding system fosters unity across the organization, ensuring that the identification code remains unchanged throughout the asset's storage and usage lifecycle.

VTC Corporation adheres to regulations for preparing accounting documentation and vouchers for every transaction, ensuring proper organization and management of these records All vouchers are required to be printed and fully signed The fixed asset accountant prepares a report detailing fluctuations in tangible fixed assets and depreciation over the period, which is then reviewed and confirmed by the general accountant before archiving the original report and photocopying it for inspection purposes.

The company adheres to Circular No 200 of the Ministry of Finance for accounting tangible fixed assets, enhancing efficiency by maintaining its own accounts for these assets For example, housing and structures are recorded under account 211101.

+ Equipment and management tools - account 211401

Recording form of accounting books and depreciation method applied:

VTC Corporation utilizes the General Journal recording method, a popular choice among Vietnamese enterprises due to its numerous advantages in accounting The company employs the straight-line method for calculating the depreciation of tangible fixed assets, which is a straightforward and efficient approach.

4.1.2 Disadvantages of Accounting for Tangible Fixed Assets and Its

While accounting for tangible fixed assets offers several benefits, it also presents certain drawbacks, primarily due to shifts in the Ministry of Finance's accounting policies Previously, corporations adhered to Decision No 15/2006/QĐ-BTC, effective March 20, 2006 However, as of now, they are required to follow Circular No 200/2014/TT-BTC, dated December 22, 2014.

In 2014, the Ministry of Finance issued Circular No 200/2014/TT-BTC, necessitating an update to the accounting software utilized by the company This update process is time-consuming and requires careful implementation to ensure compliance with the new regulations.

The regulation governing the purchase, management, and use of assets and equipment within the company, established by Decision No 641/QĐ-VTC on August 29, 2012, by the General Director of Vietnam Multimedia Corporation, requires an official update due to changes in legal regulations Notably, the threshold for recognizing fixed assets has increased from over 10 million VND to over 30 million VND, necessitating revisions to ensure compliance with current standards.

4.1.2.2 Management and Use of Tangible Fixed Assets

Purchase of tangible fixed assets:

The company has acquired tangible fixed assets, such as office equipment, which are currently stored in warehouses and not utilized for production or business activities This improper procurement leads to inefficiencies and negatively impacts the company’s capital, resulting in a loss of financial resources.

Liquidation of tangible fixed assets:

The liquidation process for tangible fixed assets remains sluggish, as exemplified by the broadcasting column in Lac Trung, Hanoi, which was damaged by a storm on June 13, 2015, rendering it unusable Despite the damage, the liquidation was only finalized in September of the same year This process involved numerous procedures and required additional documentation beyond the main accounting records, significantly impacting the accounting for tangible fixed assets.

Classification of tangible fixed assets:

Tangible fixed assets of VTC Corporation comprise four main types according to specification such as housing and structures, machinery and equipment, means of transportation and equipment and management tools

+ Housing and structures include: construction work - housing, office building, and others.

+ Machinery and equipment include: host system and network equipment, modulator, broadcasting column, and others.

+ Means of transportation include: cars, electrical system, and others.

+ Equipment and management tools include: television, air conditioner, projector, photocopier, and others

According to forming sources, the company has tangible fixed assets formed from own capital and tangible fixed assets formed from borrowing capital

Suggestions for Improving Accounting for Tangible Fixed Assets and Its

VTC Corporation is committed to adhering to current regulations regarding the management, use, and accounting of tangible fixed assets and their depreciation To ensure compliance, the company must update its accounting software in line with legal requirements As per Circular No 200, VTC Corporation has the flexibility to design its own accounting book formats, tailored specifically for both general accounting and tangible fixed assets Additionally, it is essential for the company to formally document the regulations concerning the purchase, management, and utilization of assets and equipment, as outlined in Decision No 641/QĐ-VTC issued by the General Director of Vietnam Multimedia Corporation on August 29, 2012 Furthermore, VTC Corporation is required to prepare an annual report on the status of its tangible fixed assets to facilitate effective asset management and utilization.

4.2.2 Management and Use of Tangible Fixed Assets

Procurement of tangible fixed assets:

VTC Corporation should liquidate unused tangible fixed assets to recover capital Prior to acquiring any tangible fixed assets, the company must develop and rigorously approve a specific plan tailored to its actual situation and departmental needs Immediate utilization of these assets is essential to generate profit and ensure a steady future cash flow for the company.

Liquidation of tangible fixed assets:

To optimize the use of tangible fixed assets, VTC Corporation must evaluate and liquidate severely damaged or fully depreciated assets promptly This strategy enhances operational efficiency by eliminating outdated resources Operating in three key sectors—Information Technology and Digital Content, Television, and Telecommunication—the company prioritizes Digital Content services, which rely heavily on advanced technology and infrastructure With rapid technological advancements, VTC must continually innovate its tangible fixed assets, particularly by replacing obsolete items, such as televisions acquired in 2010, which hinder productivity By investing in modern assets, VTC Corporation can significantly improve the quality and efficiency of its business operations.

Classification of tangible fixed assets:

Tangible fixed assets can be effectively managed and utilized by classifying them based on their usage situation, in addition to their specifications and sources These assets are categorized into five distinct types, allowing for improved oversight and operational efficiency.

+ Tangible fixed assets used for production and business;

+ Tangible fixed assets used for capital construction;

+ Tangible fixed assets used for welfare;

+ Tangible fixed assets used for non-business activities;

+ Tangible fixed assets awaited for processing.

This classification enables companies to efficiently manage their tangible fixed assets by tracking their usage for business activities versus other purposes Consequently, companies can identify strategies to enhance the efficiency of these assets.

Table 4.6: Classification of Tangible Fixed Assets According to Situation of

No Type of assets Historical cost Depreciation Residual value

Tangible fixed assets used for production and business

Tangible fixed assets used for capital construction

3 Tangible fixed assets used for welfare

Tangible fixed assets used for non-business activities

5 Tangible fixed assets awaited for processing

4.2.3 Accounting for Tangible Fixed Assets and Its Depreciation

To enhance the tracking and management of tangible fixed assets, it is essential for the accountant to fill in the Page and Line columns in the General Journal for Ledger Account 211 Completing these columns will facilitate effective monitoring and collation of asset fluctuations.

The Order column, also referred to as the "No." column, should be positioned on the left side or precede the Code column in the summary table of fixed assets The revised summary table of fixed assets, illustrated in Table 4.2, is recommended for company use, as it facilitates easier tracking and identification of a substantial number of assets.

VTC Corporation utilizes the Bravo 7 software from BRAVO Software Joint Stock Company, known for its flexibility and ease of adjustment due to its three-layer architecture This design allows for seamless integration of program modules and connectivity with other software To effectively manage tangible fixed assets across departments, the company should maintain a detailed fixed asset book for each department, enabling efficient tracking and management of asset fluctuations.

Table 4.7: Summary Table of Fixed Assets

Name of tangible fixed assets

Table 4.8: Fixed Asset Detailed Book in Each Department

FIXED ASSET DETAILED BOOK IN EACH DEPARTMENT

Record the increase of fixed assets Record the decrease of fixed assets

Description Unit Quantity Unit price Total Voucher

Tangible fixed assets and their accounting are crucial for businesses, particularly for managers, due to their significant role in operations This research on the accounting practices and depreciation of tangible fixed assets at Vietnam Multimedia Corporation has enhanced my understanding of fixed asset characteristics and management The company's accounting department is effectively structured, with a clear delineation of roles and responsibilities within the Finance and Planning Department, fostering strong interdepartmental connections.

VTC Corporation effectively manages and tracks its tangible fixed assets, ensuring compliance with legal regulations in accounting and depreciation practices The strengths of the accounting department include skilled human resources, adherence to legal provisions, and the use of robust accounting software However, the company faces challenges in updating its accounting practices in line with changing legal regulations By addressing these issues and implementing recommended improvements, VTC Corporation can enhance its accounting processes for tangible fixed assets and their depreciation.

I would like to express my sincere gratitude to my supervisor, Mr Tran Manh Dung, PhD, CPA, for his invaluable support in completing my internship and bachelor's thesis Additionally, I extend my thanks to Mr Hoang Le Son, PhD, Chief Accountant of Vietnam Multimedia Corporation, for his direct assistance during my internship at the company.

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Items Housing and structures (VND) Machinery and equipment (VND)

Equipment and management tools (VND)

Means of transportation (VND) Total (VND) Historical cost

MINUTES OF INSTALLATION AND INSPECTION OF TANGIBLE FIXED ASSETS

By Mr (Mrs.):……… Position:…….………… as representative

Two parties agreed to sign the Minutes of Installation and Inspection of Tangible Fixed Assets, as follows:

No Equipment Description Quantity Current status Accessories

Notes (Opinion of two parties):……….

MINUTES OF HAND-OVER OF TANGIBLE FIXED ASSETS

Based on Decision No ……… …Today,………./…………./20……… Assigner:……….……….Position……….……… Assignee:……… Position………

1 Assigning content: Confirmation about hand-over of assets and equipment as follows:

No Equipment Description Quantity Current status Historical cost

No Accessories’ name Unit Quantity Value

The assigner guided fully how to use the assets and equipment The assignee had no idea

XÁC NHẬN CỦA GIÁO VIÊN HƯỚNG DẪN

Kính gửi: Trung tâm đào tạo Tiên tiến, Chất lượng cao và POHE

Họ tên GVHD:……… Đơn vị công tác: ………

Lớp:……… Đã thực tập tốt nghiệp trong thời gian từ:………đến………

Về tinh thần, ý thức, thái độ:………. ………

Về trình độ, năng lực học tập và nghiên cứu:……… ……… ………

Hà Nội, ngày…….tháng.……năm 2016

Giáo viên hướng dẫn (Họ tên, chữ ký) Báo cáo thực tập tổng hợp

Tiêu đề	Accounting Improvement for Tangible Fixed Assets and Its Depreciation at Vietnam Multimedia Corporation
Tác giả	Mai Dieu Ly
Người hướng dẫn	Hoang Le Son, PhD, Tran Manh Dung, PhD, CPA
Trường học	National Economics University
Chuyên ngành	Advanced Accounting
Thể loại	bachelor's thesis
Năm xuất bản	2016
Thành phố	Hanoi

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