The provisions of Article 4 of the Notice of the Ministry of Finance of State Taxation Administration of The People's Republic of China on Several Issues Concerning the National Implementation of VAT Transformation Reform (Caishui [2008] 170):

Since 2009 1 month 1 day, taxpayers selling their used fixed assets (hereinafter referred to as used fixed assets) should collect value-added tax according to different situations:

(1) Sales of self-used fixed assets purchased or self-made after 2009 1 month 1 day shall be subject to VAT at the applicable tax rate;

(2) Taxpayers who were not included in the pilot project to expand the scope of VAT deduction before 20081February 3 1 day, and sold their own used fixed assets purchased or made by themselves before 20081February 3/day, will be subject to VAT at a rate of 4%;

(3) Taxpayers who have been included in the pilot project of expanding the scope of VAT deduction before1February 3 1 2008, who sell their own used fixed assets purchased or made by themselves before the pilot project of expanding the scope of VAT deduction in this region, will be subject to VAT at a rate of 4%; Sales of self-used fixed assets purchased or self-made after the pilot project of expanding the scope of VAT deduction in this region shall be subject to VAT at the applicable tax rate.

Borrow: Fixed assets (fair price)

Bad debt provision (if accrued)

Non-operating expenses-debt restructuring losses

Credit: accounts receivable

asset impairment loss