Question:
Our company is currently investing in the construction of a mixed-use project comprising three blocks: residential units for sale (commercial, social housing, resettlement, and rental) and a commercial center for business leasing. So, does the area of the commercial center, after it is established, qualify as the Fixed Assets (Tangible Fixed Assets) of the company? and can it be depreciated in accordance with Circular No. 45/2013/TT-BTC?
Answer:
Based on Section 1, Article 1 of Circular No. 147/2016/TT-BTC dated October 13, 2016, issued by the Ministry of Finance, which supplements the end of Point d, Section 2, Article 4 of Circular No. 45/2013/TT-BTC dated April 25, 2013, which guides the management, use, and depreciation of fixed assets, it is stated that: In the case of a company investing in the construction of a mixed-use project, such as residential units for sale that are both used for the company’s activities and for sale or lease according to legal regulations, if the company determines that the area of the commercial center is an asset used in the company’s operations, then the area of the commercial center is recognized as Tangible Fixed Assets (TFA) and can be depreciated according to regulations. The portion of the property (area) designated for sale or leasing is not recognized as TSCĐ and cannot be depreciated. If the company does not separate and distinctly identify the portion of the property designated for sale or leasing, the entire asset is not recognized as TSCĐ and cannot be depreciated.
