ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY

1 NATIONAL ECONOMICS UNIVERSITY CENTER FOR ADVANCED EDUCATIONAL PROGRAMS ***************************** BACHELOR’S THESIS IN ACCOUNTING ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY Student’s name ID Class Intake Internship guide Instructor : Tran Thuy Tien : 11123956 : Advanced Accounting : 54B : Dr Pham Duc Cuong : Hanoi - 2016 M\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ ACKNOWLEDGEMENTS During the time practicing as an intern at Aviation Printing Joint Stock Company, it is my honor to say that after three months working at here, from January 15th to April 15th 2015, I have taken a huge opportunity being exposed into such a highly professional working environment People staffed at Aviation Printing Joint Stock Company treated me with the respect as colleagues even I was not an official staff I found the occasion to acknowledge more about characteristics of accounting in practice, while applying the knowledge I have learned at university by the best way during the internship Special thanks go to Dr Pham Duc Cuong, lecturer at the School of Accounting and Auditing, National Economics University and colleagues in accounting department of AVIPRINT., JSC for their patience, helpful and enthusiastic guidance for me in completing this report Student, Tran Thuy Tien TABLE OF CONTENTS ACKNOWLEDGEMENTS INTRODUCTION CHAPTER 1: THEORETICAL ACCOUNTING FRAMEWORK FOR FIXED ASSETS 1.1 Overview of Fixed Assets 1.1.1 Characteristics and classification of fixed assets 1.1.2 Management and usage of fixed assets 1.2 Vietnamese Accounting Regulation on increases and decreases of fixed assets 1.2.1 Determination of cost for fixed assets 1.2.2 Accounting for fixed assets at subledger level 1.2.3 General Accounting for increase, decrease in fixed assets 1.3 Accounting for depreciation of fixed assets 1.3.1 Methods for depreciation of fixed assets 1.3.2 Principles for depreciation of fixed assets 1.4 Accounting for maintenance and repair of fixed assets 1.5 Comparison of VAS and IAS and fixed assets 1.5.1 International accounting for fixed assets 1.5.2 Similarities and differences between VAS and IAS for fixed assets CHAPTER 2: CURRENT SITUATION OF ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY 2.1 Overview of Fixed Assets at AVIPRINT., JSC 2.1.1 Characteristics and classification of fixed assets 2.1.2 Management and usage of fixed assets 2.2 Accounting application for increases and decreases of fixed assets at AVIPRINT., JSC 2.2.1 Accounting documents and procedures 2.2.1 Accounting for increase of fixed assets at subledger level 2.2.3 General Accounting for increase of fixed assets 2.3 Accounting application for decreases of fixed assets at AVIPRINT., JSC 2.3.1 Accounting documents and procedures 2.3.2 Accounting for decrease of fixed assets at subledger level 2.3.3 General Accounting for decrease of fixed assets 2.4 Accounting application for depreciation of fixed assets at AVIPRINT., JSC 2.5 Accounting application for maintenance and repair of fixed assets at AVIPRINT., JSC CHAPTER 3: DISCUSIONS AND RECOMMENDATIONS ON ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY 3.1 Discussions on accounting for fixed assets at AVIPRINT., JSC 3.1.1 Advantages of accounting for fixed assets at AVIPRINT., JSC 3.1.2 Disadvantages of accounting for fixed assets at AVIPRINT., JSC 4.2 Recommendations on accounting for fixed assets at AVIPRINT., JSC CONCLUSIONS ON ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY REFERENCES APPENDIXES 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 the quoted literature and other sources mentioned at the end of this paper Hanoi, 04/06/2016 Signature ABBREVIATIONS Acc : Account IAS : International Accounting Systems JV : Journal- Vouchers LLC : Limited Liability Company VAS : Vietnamese Accounting Systems LIST OF TABLES LIST OF FIGURES 10 CHAPTER INTRODUCTION Rationale In recent years, "Industrialization - Modernizing" is conducted broadly and comprehensively in Vietnam, scale of the building keeps an essential position in the country development in the recent years, together with national manufacturing and economic development are being carried out rapidly, as it creates "living skeletons" - the basis for the foundation of the national economy Manufacturing activity is essentially the use of labor means to impact on the object of labor to create products that serve the needs of humans Entering the market economy, many businesses might tackle a bunch of struggles, for instance, facing bankruptcy as they could not match the consumers' demand and production does not keep the market rising speed As a result, technical innovation and product quality development to fit the growing demands of society are needed As from the beginning, fixed assets play an integral in the infrastructure of the national economy, thus it is an important element of the process of social production With companies, fixed assets factor is technology, business and production capacity Fixed assets therefore are seen as a measure of the level of technology, production capacity and competitiveness of companies For every company in general and particularly Aviation Printing Joint Stock Company, it is significant not just to scale fixed assets but also to effectively exploit available fixed asset resources 53 Aviation Printing Joint Stock Company VAT Code: 0100108014 GENERAL ACCOUNT (214- Depreciation of fixed assets) Năm 2015 No Date Date Description TKĐ Debit Credit Amount U Opening … 64240 computer IBM … … … KHA0 31/12 31/12 balance … Depreciation of 1,501,084,045 … F … 2,829,444 T43 KHA0 31/12 31/12 Depreciation of 64240 Mishubishi CV17 31/12 31/12 Selling car Ben 211 312,635,892 … … 9/ TSCĐ … … 1,980,324,128 29,579,575 2,012,314,162 CA3102K2-10A … … … Total amount Arising amount Closing balance … … 1,973,707,866 524,414,000 1,973,707,866 524,414,000 51,790,179 st December, 31 2015 Preparer Chef accountant (sign, name) (sign, name) [Type text] Cuong Director (sign, name, stamp) [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 54 2.5 Accounting for maintenance and repair of fixed assets at AVIPRINT., JSC AVIPRINT., JSC with main business activity is construction that has a large number of fixed assets with high value and long using time As a result, during the company's operations, they conduct a lot of repairs for fixed assets in order to maintain production and business activities normally Company has no unplanned overhaul and renovation of fixed assets 2.5.1 Regular repair of fixed assets at AVIPRINT., JSC Company often conducts repair of following fixed assets: computers, office equipment, replace some small parts of machinery The costs are usually recorded into account 642- General and administration expenses On October 15, 2014, Le Van Chung - Driver refunds repair cost of maintenance car 29N-9541: VND640,000 out service rental, cost of materials, spare parts is VND3,200,000 Accountant, based on repair bills, will record as follows: Aviation Printing Joint Stock Company VAT Code: 0100108014 ACCOUNTING VOUCHER Date: October 15th, 2015 Description: Le Van Chung - Driver refunds repair cost of maintenance car 29N-9541 Account 642705- Outsourced repair office assets 1331110101: VAT 1410101- Le Van Chung - Driver refunds repair cost 642203- Cost of maintenance car 29N-9541 Debit 640,000 320,000 Credit 4,160,000 3,200,000 December 31st 2015 Preparer Chef Accountant (sign, name) (sign, name, stamp) Computer will transfer the information into Journal automatically [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 55 2.5.2 Accounting for overhaul of fixed assets at AVIPRINT., JSC Based on the planned overhaul of the fixed assets, the technical and accounting departments of the company and branches will report the current situation of vehicles, machinery, equipment to put them in repair Additionally, company prepare the overhaul plan, after being repaired, they shall make technical test, send all documents about overhaul back to the accounting department of AVIPRINT., JSC including : Minutes of the inventory count and status of fixed assets, cost estimation for overhaul The Company does not conduct cost of repairing, based on the vouchers, will conduct costs for the branch Based on the plan, the company had impairment for assets, for this activity, accountants use the following documents: [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 56 AVIATION PRINTING JOINT STOCK COMPANY SOCIALIST REPUBLIC OFVIETNAM Code: 2612 XN/KT-VT Independence – Freedom – Happiness MINUTES OF VEHICLE CHECKING Name Car: Hyundai Automobiles 29T-8537 Code: 21130909 Registered Code: 09 Machine Code: R683514 Number: 695832 Origin: China Year of use: 2010 Volume repair: No Name the parts Corrective Unit Quantity Poorly working measures - Degrease Box 02 - Replace piston need repair Meadow Depravity Piece 01 Motion system Working Replace marbles Piece 04 and genetics Brake parts, irregularly Worn brake Replace the brake Piece 02 switches Electrical parts Chassis and pads Booting poor Distortion of the pads Replace batteries Resetting the car Piece Piece 01 01 other structures Head of the team (sign & fullname) [Type text] Cuong car Repair Techniques (sign, fullname, stamp) Director (sign fullname, stamp) [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 57 Accountants of the branch will estimate overhaul, at the end of the repairing process, accountant will send all documents to the accounting department of AVIPRINT., JSC COST APPLICATION Repair Estimation - HUYNDAI 29T-8537 September, 2015 No Description Cost of raw materials: VL= 1%VLđg Cost of extra materials: Ratio Amount 85,659,750 0,01 856,598 VLp=1%VLđg Labor cost: NC=NCđg 2,326,986 Extra costs Px=23.5% 0,235 546,842 Estimated price 89,390,176 Rounded amount 89,400,000 In words: Eighty four million forty thousand Vietnam dong Preparer Director (sign, name) [Type text] Cuong (sign, name, stamp) [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 58 After estimation, the company carries out overhaul of assets and settlement records as follows: MINUTES OF REPAIR ACCOUNTING Name Car: Hyundai Automobiles 29T-8537 Code: 21130909 Registered Code: 09 Machine Code: R683514 Number: 695832 Origin: China Year of use: 2010 Vehicles, machinery and equipment have been put into repair inspection records under digital 2621CN / VT-CG dated 09/13/2015 and put into use according to inspection records Digital 2635CN / VT-CG dated 10/15/2015 Company using: Aviation Printing Joint Stock Company Company repair: Aviation Printing Joint Stock Company Repair time: From 14/09/2015 to 14/10/2015 Settlement basis: - Based on the request for the correction of the Corporation In Aviation - Based on the inspection records technical condition before it enters the car repair, repair cost estimates, records checking the technical condition car after repairs - Based on the repair contract and vote to spend money - Value settlement: Price estimates: 95,647,997 VND Settlement value: 95,647,997 VND Approved settlement value: 95,647,997 dong Accountant Director (sign, name, stamp) [Type text] Cuong (sign, name, stamp) [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 59 Pursuant to the settlement of documents, accountants will pay money reflected in the following payment bill: PAYMENT VOUCHER October 15th, 2015 Debit: … Credit:… Receiver: Tran Anh Tuan Address: Planning Department Reason: Repair of fixed asset Amount: 95,647,997 VND (In words: Ninety five million six hundred forty seven thousand nine hundred ninety seven Vietnam dong) Enclosed: Original documents Director Chef accountant (sign, name, stamp) (sign, name, stamp) Preparer (sign, name, stamp) Total amount received (in words): … Cashier Receiver (sign, name) (sign, name) Exchange rate (gold, silver, precious stone): Conversed amount: Accountants will record as follows: [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 60 Aviation Printing Joint Stock Company VAT Code: 0100108014 ACCOUNTING VOUCHER Number: CTHT189A Date: October 31st, 2015 Description: Accounting cost for Huyndai 29T-4362 Account 33501-CP SCL- Fixed asset 1368010801- Working capital Preparer (sign, name) [Type text] Cuong Debit 95,647,997 Credit 95,647,997 December 31st, 2015 Chef accountant (sign, name, stamp) [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 61 CHAPTER DISCUSIONS AND RECOMMENDATIONS ON ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY 3.1 Discussions on accounting for fixed assets at AVIPRINT., JSC 3.1.1 Advantages of accounting for fixed assets at AVIPRINT., JSC - Management of fixed assets: At AVIPRINT., JSC, fixed assets, which mainly used for the printing manufacturing activities, will be assigned to each branch, and after receiving, they will serve the right purpose as plans of the company The company has inventories count periodically or annually to detect cases of excess or lack of fixed assets, as well as whether they need repair or liquidation Accounting work of the company is compliance with state regime, relatively consistent with the current conditions of production and sale Despite the huge workload and mostly manual accounting, accounting work is still fully carried out to ensure adequate time to submit reports - Organization of the accounting department: The financial system - accounting in AVIPRINT., JSC relatively compact and efficient form of computerized accounting applied in the company has actually promoted demanding requirements of the job, reducing manual labor public, fast service and timely requests for general business management and material management of the company in particular The company has reviewed and issued to the technical and economic norms to suit practices, increase savings, reduce costs and enhance competitiveness of the business position in the market The employees in the accounting department at AVIPRINT., JSC are greatly qualified with both good background knowledge and experienced skills This is an important aspect to improve the accounting process’s excellence All accountants are [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 62 assigned to specific individual tasks in the process, thus providing the basis for specialization in each one’s job performance In addition, the company occasionally invites experts, professors of economics schools to train for the accounting department staffs Besides, the company's accounting system is organized under the model centralization and dispersion, for the branch, they must have independent accounting work and production activities then periodically or monthly send aggregate data to the accounting department of the company This is an advantage to increase the autonomy of the subordinate units without loss of time or delay in accounting work - Accounting software: According to the guidelines and requirements of the company operating in a competitive market, accounting department has used software MISA to support for accounting work, which is fast, accurate and professional in the classification and reporting - Vouchers: Vouchers for each transaction arising are always fully established, reasonable and valid under the provisions of the Ministry of Finance Process of voucher rotation is implemented in a coherent way to help auditors facilitate the arrangement of fixed assets under management targets, or research when necessary - Accounts used in accounting system: The company applies system of accounts issued by decision 45/2013 / QD-BTC In addition, the company also opened the some accounts level 3, which advantageous in accounting for the fixed asset Voucher system, the company applied today, although not yet complete but relatively sufficient and accordance with the provisions of current accounting regulations and simultaneously with the actual situation of the Company The rotation process of voucher/book system is conducted in a close and scientific way to meet information needs and create an intimate relationship between the parts and the whole [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 63 accounting system in order to well promote the creation of report In addition, the application of accounting systems in the form of "journal voucher" is consistent with the actual situation of the company in terms of size, level of management and information requirements of managers - Overhaul of fixed assets: Frequent repairs of fixed assets for the manufacturing process are to ensure manufacturing business without interruption Besides, the company is very active in raising capital and credit for investment in fixed assets 3.1.2 Disadvantages of accounting for fixed assets at AVIPRINT., JSC - General accounting for fixed assets: Transactions related to fixed assets are reflected in General Ledger and Journal, however in the Journal, it has no column "stated General Ledger" This will lead to difficulties in controlling and monitoring the process of recording Similarly, General Ledger has no column “Journal page" - Financial analysis: Quarterly or annually, the company did not conduct an analysis about the effective use of fixed assets through the information about the increase, decrease, maintenance and depreciation in relation to sales, costs and profits This analysis is very useful for management, inspection and surveillance operations and business of the company - Recording of transactions: + The company has established rules and principles of liquidation, sale this is a good thing However, accountants record the transactions related to increase or decrease in fixed assets based on the date on the voucher, not based on the actual date of recording This business nature is not followed the timely assertion, the company should conduct a review that in accordance with proper accounting principles Vouchers/accounts/books/reports mainly stored on the computer, only some are stored in hard copy Therefore, it is easily happened that data inconsistencies and [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 64 misleading Furthermore, the book systems are cumbersome and complicated The unit accounting has large quantities and put at the end of the month but still done manually 3.2 Recommendations on accounting for fixed assets at AVIPRINT., JSC Nowadays, accounting is one of the most important functions in the company The duty of accounting is recorded and reflected all transactions arising during the business in order to provide information for multiple inside and outside users of the company Therefore, the accounting and especially accounting for fixed assets should be improved day by day to meet the requirements of the company Some recommendations for improving the accounting for fixed assets at AVIPRINT., JSC: - About recording of transactions, as mentioned above, accountants should record based on the actual date of recording not the date on vouchers to follow the principles of accounting - According to the regulations of the company, fixed assets are repaired only on plan of overhaul not the exact time of property damage If during the using time, there is damage, it would cause many difficulties for the management, as well as the accounting department Therefore, company should carry out the overhaul of assets outside the plan to fix them in time to be able to take advantage of the property at full capacity during the beneficial use - Perform periodic financial analysis of the situation and efficiency of fixed assets through the information on increase, decrease, and depreciation of fixed assets in relation to revenue, expenses, profit in order to adjust the orientation or manufacturing business activity of the company in the future For example: Financial position of AVIPRINT., JSC in 2012, 2013, 2014 Unit: VND December, December, 31th, 2014 [Type text] Cuong December, 31th, 2013 31th, 2012 2014 vs 2013 vs 2013 2012 +-% +-% [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 65 Cash and cash equivalent Accounts Receivable Inventory Fixed Assets Accounts Payable 10,299,742,423 3,864,214,770 7,354,464,156 166.54 (47.45) 15,248,986,950 23,428,855,665 16,456,261,881 (34.91) 42.37 11,225,273,293 12,334,274,419 6,241,949,571 7,513,936,497 11,032,780,324 10,085,223,809 (8.99) (16.92) 11.79 (25.49) 18,364,039,382 22,393,053,439 20,908,345,921 (17.99) 7.10 In addition, each working day of the accounting staff includes eight hours, which includes useful and useless time Therefore, the company needs to take measures to increase the useful time while reducing the time wasted during the day Some measures may be proposed: - Should have strict discipline modes for employees who violate labor discipline, besides, enhancing self-discipline - Assign responsibility for each person associated with the work they have to so that they have consciousness to complete quickly and avoid unnecessary wastes - Should bonus more to encourage employees when they are well - disciplined and well complete the assigned work on time [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 66 CONCLUSIONS ON ACCOUNTING FOR FIXED ASSETS AT AVIATION PRINTING JOINT STOCK COMPANY Over the time of fifteen years, in spite of the troublesome circumstance with respect to intense rivalry and stagnant economy, AVIPRINT., JSC has possessed the capacity to confirm its position in the improvement of Vietnam Printing Industry During my internship period at accounting department, I have observed that employees are the root making the success of an institution and knowing that well, AVIPRINT., JSC has its own strategies to make use of this source Being approached, I have acknowledged about the accounting system as well as the documents, accounting books and reports at the company Therefore, I have chance to compare the knowledge I have been learned at university with the actual conditions in the actual environment The internship process at the company also facilitates and provides an opportunity for me to become familiar with the actual accounting work in the business to better prepare for the job- my own career in future Special thanks to Dr Pham Duc Cuong, and colleagues in accounting department of AVIPRINT., JSC for their dedicated instructions to help me complete this report The last sincere thanks are for people spending time to read and leave comment on my report This report is important to me as it serves a vital role for being a part of my final graduate thesis [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54 67 REFERENCES Vietnamese Đặng Thị Loan (2015) - Kế toán Tài Doanh nghiệp (NXB Đại học Kinh tế Quốc dân) English AVIPRINT., JSC’s annual reports Vietnamese accounting systems Circular 45/2013 / TT-BTC- guiding the management, use and depreciation of fixed assets Decision 200/2015/QĐ-BTC Websites Aviation Printing Joint Stock Company – Address: http://www.aviprint.com.vn/ VNDIRECT Securities Corporation – Address: https://www.vndirect.com.vn/portal/ho-so-doanh-nghiep/ihk.shtml [Type text] Cuong [Type text] [Type text]Supervisor: Dr Pham Duc Tran Thuy Tien- Advanced Accounting 54