When assets or spare parts were damaged in accidents, their salvage value can be treated as deductible expenses upon sale or disposal. If they are sold, the seller is responsible to collect VAT from the buyer based on the actual selling price, and include the VAT in the monthly VAT computation.
In the event that assets or spare parts are lost and such loss is not covered by insurance or a protection agreement, a company can claim the remaining book value of the lost assets or spare parts as an operational loss. The full amount of the claimed loss can be treated as deductible expenses only if the company is able to provide credible proof of the loss. However, any displacement of assets or spare parts is considered equivalent to a sale of such asset or spare parts, and therefore, VAT must be paid based on market value.
Contact MSNA, Thailand Accounting firm for your accounting and tax questions.