Accounting and Finance

Vietnamese Accounting Standards ("VAS")

Vietnamese Accounting Standards ("VAS")

The Ministry of Finance of Vietnam ("MoF"), through the Accounting and Auditing Policy Department, implemented the Vietnamese Accounting Standards ("VAS"). These standards are based on International Financial Reporting Standards ("IFRS").

International Financial Reporting Standards ("IFRS")

The International Financial Reporting Standards (the “IFRS”) used to be known as International Accounting Standards (the “IAS”) has been issued by the IASB. In 2003, IASB issued a standard on transition to IFRS. Standards after this period will have the designation of IFRS instead of IAS. Previously released IAS standards will maintain their original designation.

Useful lifespan applying to assets for tax purpose

Decision 206/2003/QD-BTC dated December 12, 2003 states the criteria to recognize the fixed assets and also a range of depreciation rate applying to fixed assets. The depreciation rate in the Decision 206 is applicable to all state owned enterprises. For other types of enterprises (i.e. foreign invested enterprises, joint stock companies, limited companies and other enterprises), the depreciation rate is applied for tax calculation. The depreciation rate regulated in the Decision is presented below:

Variances in treatment of foreign exchange differences between VAS 10 and IAS 21

VAS 10 treats the foreign exchange differences by two stages: during initial stage or construction stage then during the course of business. In VAS 10, foreign exchange differences during the construction stage are deferred on the balance sheet account. After the assets are put into operation, foreign exchange differences are capitalized over a period of three years. All foreign exchange differences occurring during the course of business are treated in the income statement in the same manner as in IAS 21.

VN GAAP Chart of Accounts

In general, VN GAAP for business enterprises has two main accounting systems. One is for industrial enterprise and the other is for credit institutions. Chart of accounts for these two systems are regulated and quite rigid. Modification is not encouraged by the Ministry of Finance. There are a number of global companies come to Vietnam find difficult to map their global chart of accounts into the local one since the chart of accounts in compliance with IFRS is relatively suggestive while under VN GAAP is compulsory.


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