Overview of Vietnam Generally Accepted Accounting Principles (VN GAAP)

Written by |on 30 June, 2022

VN GAAP which is more than well-known by the name Vietnamese Accounting Standards and System is not one set of accounting principles but is dispersed in laws and regulations. VN GAAP consists of various legal documents including accounting law, accounting standards and their interpretation, financial management regime, accounting regime, and guidance on the accounting treatment of specific transactions.

Accounting law issued by the National Assembly is the legal framework for the accounting profession.

Vietnamese Accounting Standards (VAS) are issued in compliance with International Financial Reporting Standards. So far, twenty-six (26) standards are issued. However, these standards haven’t been updated following the IFRS’s revision. Besides issuing VAS, the Ministry of Finance also issued VAS interpretation – further guidance for implementation of the standards in which prescribed accounting treatments are provided.

Vietnamese Financial Reporting Standards (VFRS) is primarily introduced in Decision 345, 2020. Following this Decision, IFRS shall be fully adopted in Vietnam (VFRS) by 2025.

Financial management regime is imposed on specific sectors or industries. The regime issued is for the purpose of government examination. The legal document is tax-driven and defines the “norm” for expenditures and revenues of the entities and their distributed profit.

Accounting regimes are major accounting principles with guidelines. The accounting regime is mainly published by the Ministry of Finance (MOF). The accounting regulations for credit institutions are issued by the State Bank of Vietnam (SBV). Accounting regimes contain:

  • Chart of accounts
  • Forms of financial statements
  • Prescribed accounting treatment
  • Supporting documents

At present, there are two main accounting regimes. One is for business corporations regulated in Circular 200, 2014 and Circular 133, 2016 (small and medium-sized enterprises) issued by the MOF, and the other is for the credit institutions – Decision 479, 2004 issued by the SBV.

Laws and regulations reference

Decision 345, 2020 – Decision 345/2020/QD-BTC dated 16 March 2020 approving the adoption of International Financial Reporting Standards (IFRS) in Vietnam

Circular 133, 2016 – Circular 133/2016/TT-BTC dated 26 August 2016 regulating Vietnam accounting regime for small and medium enterprises

Circular 200, 2014 – Circular 200/2014/TT-BTC dated 22 December 2014 regulating Vietnam accounting regime for corporates

Decision 479, 2004 – Decision 479/2004/QD-NHNN dated 29 April 2004 regulating the accounting regime for the credit institutions

Tags: