Factual situation and orientation for applying International Financial Reporting Standards IFRS in Vietnam

Factual situation and orientation for applying International Financial Reporting Standards IFRS in Vietnam Nhân tố ảnh hưởng đến việc áp dụng chuẩn mực kế toán IFRS vào Việt Nam As a matter of fact, these standards are quite complex and their understanding require deep and detailed knowledge not only of accounting but also of other disciplines. Thus, the degree of their acceptance requires a highly advanced level of expertise by countries adhering to such standards. Actually, understanding, interpreting and applying these standards need a certain level of education and university training.

IFRS in Vietnam

+ Introductio 2

n

Reason for selecting the subject

Rearch situation

in Vietnam and abroad

Purpose of the study

Subject of the study

Methodology used to research

Scope of research

• Theodore và I – Ling

(2017) Mandatory IFRS

Adoption and the

Usefulness of Accounting

Information in Predicting

• Fatma Zehria và Jamel

Chouaibib (2013),

Adoption determinants of

the Interantional Accounting

Standards IAS/IFRS by the

developing countries

Comparison between IFRS and VAS

Benefits of adopting IFRS

List of IFRS Standards

Theoretical framework and the affect factors

The process of formation

and development of IFRS

Global institutional framework

for IFRS implementation

2

3

4

5

Economic growth

rate

Education level

Culture

Openness to the

exterior world

Legal System

ECONOMIC GROWTH RATE

Vietnam’s Economic growth rate depends on the synchronous development of the national economy Vietnam's economy is able to integrate with the international community, the application of international accounting standards is a important steps

2

3

4

5

Economic growth

rate

Education

level Culture

Openness to

the exterior world

Legal System

EDUCATION LEVEL

As a matter of fact, these standards are quite complex and their understanding require deep and detailed knowledge not only of accounting but also of other disciplines Thus, the degree of their acceptance requires a highly advanced level of expertise by countries adhering to such standards Actually, understanding, interpreting and applying these standards need a certain level of education and university training

The affect factors to aplies IFRS

2

3

4

5

Economic growth

rate

Education

level

Culture

Openness to the

exterior world

Legal System

CULTURE

It is a well known fact that culture is a major critical factor in explaining the choice of relevant accounting systems of appropriate to each nation

Hofsted (1980) have stressed that cultures might differ according to four major cultural dimensions: the power extent distance, individualism, masculinity and uncertainty avoidance

Doupnik and Salter (1995) show that cultural norms and values vary in respect of the significant developments engendered by the external environment

2

3

4

5

Economic growth

rate Education level

Culture

Openness to the

exterior world

Legal System

OPENNESS TO THE EXTERIOR

WORLD

According to these authors, the higher the country’s economy openness degree is, the higher the country is exposed to external pressures.

The affect factors to aplies IFRS

2

3

4

5

Economic growth

rate Education level

Culture

Openness to

the exterior world

Legal System

Decision 47/2005 / QĐ-BTC, The Finance Ministry has additionally stopped theappointment of professional staff to join the National Accounting Council, thedrafts of accounting and auditing standards or the drafting of the accountingregime.

LEGAL SYSTEM

Overview in the world The application of IFRS

in Vietnam

Patterns of acquisition at dynamic

enterprises in Vietnam

VP Bank Electricity Vietnam Vingrou

p

Since 2011, VPBank is one of the leading commercial joint stock banks Contributing to the enhancement of information transparency has created trust from investors and international partners over the years

VPBank has been active in working with independent auditors to prepare and issue IFRS financial statements, facing many difficulties in converting the financial statements from VAS to IFRS

Standards that have been issued but not yet effective include IFRS9, IFRS15, IAS27

Because there are large differences between VAS and IFRS, EVN’s conversion to IFRSs can not be fully compliant with IFRS

2015, has been prepared in accordance with IFRS2 issued by IFRS2 on the basis of historical cost except for improvements related to IFRS2 which have adopted other improvements:

IFRS 3: Business Consolidation

IFRS 8: Operations

Also use the standards in IFRS such as IFRS 13, IAS 40

Overview in the world The application of IFRS

STRONG

WEAKNESS

It is guaranteed by international standards and

recognized by foreign investors as a condition for

enterprises to access capital on the international

market Helping Vietnamese enterprises to

operate more efficiently because of a global and

reliable standard, minimizing costs of capital and

costs.

Can not fully comply with international financial reporting standards IFRS, parallel application of two financial reporting systems in accordance with VAS and IFRS in business units, financial constraints and human resources , requires a lot of inventory information, receivables, pay; Determination of fixed asset losses, Information on the value of financial investments lack

of information on the market price as reference to assess the fair value of financial assets

7 parts

Group 1: Adopting fully IFRS

Group 2: Applying

IAS/IFRS-modified VAS/VFRS.

Group 3: Applying simple

accounting system.

• First Opinion

• Second Opinion

• Firstly

• Secondly

Challenges and hindrances of applying International Accouting Standards in VN enterprises.

Applying IAS/IFRS orientation in Vietnam

About expected orientation

Vietnamese IFRS applying method suggestion

3. 1 3.2

• Enterprises listed on stock exchange are pioneers to apply IFRS Those who are not listed should step by step make approachs, modifications, addtions to get close to IFRS as much

as possible

• Chamber of Finance

• Human resources

Petitions

f



Small and

Medium

enterprise

s (SMEs)

1

Public interest entities

2

50/50

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