On March 16th 2020, the Ministry of Finance signed Decision 345/QD-BTC approving " The project on application of financial reporting standards in Vietnam" with a number of contents related to the implementation of IFRS.
To complete the legal framework on finance and accounting; Build effective and efficient management tools for the administration and operation at Businesses as well as the management and supervision of State authorities, contributing to the successful implementation of the country's socio-economic development goals.
To contribute to improving the transparency and efficiency of financial information, enhancing corporate accountability, protecting the business environment and legitimate interests of investors as well as promoting the regional and global integration of Vietnam's economy.
The roadmap for the implementation of international financial reporting standards (IFRS) in Vietnam for each specific group of businesses is as follows:
1. Phase 1: From 2022 to 2025, it is voluntary for businesses that are capable and have enough resources to prepare consolidated financial statements
2. Phase 2: From 2025 onwards, it is mandatory for businesses to prepare IFRS consolidated financial statements and separate financial statements.
Requirements and instructions on the implementation of IFRS:
- Businesses must present and explain in detail in the financial statements the differences between accounting profit and taxable income (if any). Businesses shall declare and pay tax in accordance with the tax law.
- Businesses subject to IFRS implementation must apply all standards that have been in force under the provisions of the International Financial Reporting Standards Board (IASB) at the same time. When the IASB amends, supplements or replaces the IFRSs, it is necessary to promptly publish the translation to unify the implementation.
- Businesses shall have to apply IFRS, voluntarily or mandatorily, on a consistent basis throughout the financial year.
- The Ministry of Finance shall publish the list of enterprises who are voluntary or required to prepare IFRS consolidated financial statements or separate financial statements on the website of the Ministry of Finance.
An understanding of IFRS and international accounting standards (IAS) is a prerequisite for the mandatory application of IFRS. Mazars Vietnam has been actively preparing a school of experts for the IFRS project through our internal trainings, ready to meet huge demands for the preparation and/or conversion of financial statements from VAS to IFRS with specific advice responding customer requests.
References: Decision 345/QD-BTC 16/03/2020