Vietnam a rule-based concept that has strict policies,

 

Vietnam

In this assignment, I will be talking about
the different accounting system/standards used in Vietnam. Vietnam, a one-party
Socialist state, has one of south-east Asia’s quickest developing economies and
has set its sights on turning into a created country by 2020. The first
Vietnamese Accounting Standards were issued on 31 December 2001. As at 30
September 2008, there are 26 Vietnamese Accounting Standards issued. When
reading this report, you will understand the concept of Vietnam Accounting
standard/ system (VAS) and know the differences between the International
Financial Reporting Standards (IFRS) and how it’s used in international
accounting standards Board (IASB).

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The Vietnamese accounting system (VAS) was
set up after Vietnam gained its independence 1945. In Vietnam, accounting is a
vital instrument to control macroeconomic activity. Meaning Vietnamese
accounting system (VAS) has its qualities, and Vietnamese accounting system
(VAS) has not entirely met with the international accounting system. Currently,
there are 26 Vietnamese Account Standards, issued by the Ministry of Finance,
and valid to all business over all sectors. Any deviation from Vietnamese
Accounting Standards and Systems should be recorded with the Ministry of
Finance for a written agreement. As mentioned by Shire & Associates (2017)
these standards are intended to upgrade the equivalence comparability and
transparency of financial statements and bring the two structures closer.AS
usually takes a rule-based concept that has strict policies, as opposed to the
principle-based approach which is fundamentally received by the IFRS where
there is more space for expert judgment and as well as adaptability. The
principal goal of VAS is to plot accounting rules and capacities, for example,
financial statement, accounting recording strategy, and as well an overall
guideline.

 

International Financial Reporting Standards
(IFRS) are worldwide accounting standards issued and measured by the
international accounting standards Board (IASB) to guide the preparation and
presentation of financial reports. When looking at the differences between
International Financial Reporting Standards (IFRS) and Vietnam accounting
Standards (VS), they have many variations.

 

The first one is IAS 1 which stands for
Presentation of Financial Statements and VAS 21 which stands for Presentation
of Financial Statements. In the past, VAS 21 is based on the former type of IAS
1 (studied 2003). The differences are VAS 21 does not require disclosure of
management key judgments, critical rules about the future and other vital
sources of valuation of weakness. Additionally, VAS 21 requires changes in
value in the notes to the financial statements as opposed the same report.
Nevertheless, businesses stating under VAS are furthermore required to apply
the VAS chart of accounts and standard financial statements format, recommended
by Decision 15/2006-Q?-BTC issued by the Ministry of Finance, which are
expressive and fixed. Accordingly, financial statements arranged under VAS may
have different grouping and presentational changes related to a monetary
financial statement under IFRS.

 

The second differences are IAS 2
Inventories and VAS 2 Inventories, which was currently VAS 2 created in the
past version of IAS 2. The fundamental Key differences from IAS 2 are the
Estimation strategies, for example, standard. Additionally, Cost and the retail
plan are not allowed under VAS; FIFO, LIFO, recognizable proof and weighted
common approach are altogether acknowledged. On the other hand, if LIFO
strategy is developed, acknowledgment of the influence of applying LIFO
indifference with FIFO or weighted average is required.

 

 

Another difference is IAS 10 Events after
the Balance Sheet Date and VAS 23 Events after the Balance Sheet Date. Now VAS
23 is founded on the form of IAS 10 (studied in 2005). The difference between
these is While IAS 10 gives direction on the assurance of the date the
financial statements are approved for an issue which will shift depending on
the management structure, legal conditions and strategies to follow in getting
ready and finishing the financial statements, VAS 23 is quiet on this. Also,
VAS 23 mainly expresses that the issuing date is the date when the head of the
reporting entity (or an official individual) approves the issue of the
financial statements to strangers. IAS 10 does not have such direction.

 

Due to the development of Vietnam’s stock
market and the enterprises operating in several fields such as banking,
insurance, etc. requires Vietnam needs to a set of high-quality accounting
standards based on IFRS and ensure compliance to protect the interests
investors and other stakeholders. Therefore, a gradual convergence with IFRS
may be more suitable for Vietnam. The immediate goal is just convergence for
listed companies, the enterprises operating in several fields such as the bank,
insurance, and consolidated financial statements. For the remaining
enterprises, will continue to apply Vietnamese accounting standards but is
adjusted the gap towards narrowing with IFRS.

 

Also, when looking at standards the
significant differences. I consider this one to be one of most significant
differences in global stakeholder in Vietnam. IAS 16 which stands for Property,
Plant and Equipment and VAS 3 which stands for Tangible Fixed Assets. IAS 16
requires an element to measure the Property, plant, and equipment (PPE)
procured in return for a non-monetary assets or assets or a mixture of monetary
and non-monetary assets at assets price unless the trading businesses fail to
have substance or if the fair value on of neither the benefit got, nor the
advantage submitted is dependably measurable Also, IAS 16 expects firms to look
at the fair value of the assets by estimating the measuring the amount of the
transaction. However, VAS 3, a substance measures such a developed asset at
fair value. The traded assets were similar and had equivalent fair values, the
conveying measure of the assets that is applied as the cost of the new assets,
regardless of whether appropriate amounts of these advantages can be dependably
decided. Furthermore, VAS 3 does exclude inside its choice of measurement and
acknowledges the business disassembly, withdrawing and recovery costs. In
determining the value of a thing of PPE, VAS 3 just incorporates the expenses
brought about as an outcome of introducing the thing. Bad records of PPE aren’t
permitted under VAS 3 unless authorization is gotten from the government

 

 

IFRS standards may just be an arrangement
of accounting standards. However, they take enormous value to the worldwide
economy. This is best portrayed by IFRS new statement of purpose, which says:
“IFRS Norms bring straightforwardness by giving high caliber and practically
identical data.” Meaning this causes international investors to settle on more
educated venture choices. The Standards enhance responsibility by lessening the
information between those within a business and those externally. This also
encourages investors and others to consider businesses management to be
responsible.  When looking at Vietnam,
the economic environment is an essential component affecting the international
convergence of Vietnamese accounting standards. Socialist market economy in
Vietnam is still in the crucial phase of improvement; the market economic
system isn’t perfect, the business legal system is not complete, the law did
not stay aware of the business relations. Although the likelihood of
convergence could be hindered from the reasons expressed above, Vietnam with
its creating economy and developing populace accounting convergence could be
accomplished.

 

(Benito,
Brusca, and Montesinos, 2007) Recommend that the
harmonization of public accounting could add to ensure the best possible
working of the basic market. Furthermore, As Phan et al. (2013) studied the
view of Vietnam accounting profession  to
the  international convergence of
accounting the results demonstrate that the objective group Vietnam accounting
profession is very hopeful about the advantages of the meeting, however some
crucial obstacles regarding costs and as well different difficulties think one
of the changes could be the cultural differences, for example, Dialect,
education, economy, and religion in the public eye could make it hard to
portray a single set of values. For example, the dialect in Vietnam could be
interpreted through a translator, hence making it progressively troublesome for
the standard to safeguard its unique importance.

Also, some writers have expressed their
worries about how IFRS will be studied and how some professionals will stay up
with the latest with new standards such as;(
Heidhues and Patel 2008). On the other hand, Some educational both
specialized and non-specialized resources spectacle of turning into an
imperative interference for making IFRS convergence with national accounting
standards happening.

 

In conclusion, I think Vietnamese
accounting change has usual to date by drawing on the substantial help of the
State. In agreement with financial change, the Vietnamese accounting standards
have changed from serving a midway arranged economy to a serving socialist
market economy and incorporating with global accounting. Many The accounting
rules have changed to the point that today vast numbers of the ideas and
standards well-known in the most progressive economies are a piece of
Vietnamese accounting rules and laws. I think as time goes on many laws and regulation
in the accounting standard will change not only in Vietnam, so these are just
one of the many to come soon that they will have to adjust to. 

x

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