On March 16th, 2020, The Ministry of Finance issued Decision No. 345/QĐ-BTC to approve the scheme for Financial Reporting Standards’ application in Vietnam. Whereby:
- The itinerary for applying International Financial Reporting Standards (IFRS):
Phase 1 – voluntary application (from 2022 to 2025)
- Foreign subsidiaries with 100% foreign investment which have needs and sufficient resources must notify The Ministry of Finance before applying IFRS voluntarily to prepare financial statement.
- When applying IFRS, enterprises have to provide adequate information and clear, transparent explanation to tax authority, management and supervision authority, and take responsibility before law for determining their obligations to the state budget.
Phase 2 – mandatory application (after 2025):
- Based on assessment of IFRS’s application in Phase 1, the Ministry of Finance would consider the needs and capability of enterprises, related legal regulations and practical situations to regulate specified plan, issue date for IFRS’s voluntary or mandatory application to prepare financial reports separately for each target group and ensuring the efficiency and feasibility.
- The itinerary for applying Vietnam Financial Reporting Standards (VFRS):
- After drafting, issuing Vietnam Financial Reporting Standards (VFRS), followed by further instruction documents, from 2025 application of VFRS shall be deployed for all enterprises in all fields, all economic sectors in Vietnam, except those that apply IFRS or Accounting regime applicable to microenterprise.
- VFRS is constructed based on the IFRS system in accordance with the principle of maximizing international practices, suitable with peculiarities of Vietnamese economy, enterprises’ demands and ensuring the feasibility in the implementation process.
