Accounting and Finance
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.

Accounting for Small and Medium Enterprises ("SME") under VN GAAP

SMEs are a dominant segment of the private sector, accounting for 80% of total enterprises operating in Vietnam. The accounting regime for SME in Vietnam is subject to SME “ownership” rather than size, therefore the Decision 48/2006/QD-BTC, September 14, 2006 is limited to the following institutions: