Having applied in Vietnam for nearly 10 years, Accounting Law
2005 has revealed a number of limitations when it comes to
comparison with the development of the economy. According to many
experts, it is essential to make amendments to the law in order to
make it appropriate to the far-reaching global economic integration
A bill of amendments to the accounting law was submitted by
ministry of finance to the government, in which there are
breakthrough changes aiming at approaching transparency – one
of international accounting standards (IAS), accepting and
acknowledging IAS as well as the practice of accounting and
auditing in regional and international countries. After collecting
75 comments from 15 ministries, 36 provincial committees, entities,
corporations and organisations, several articles of accounting law
have been amended and added.
On November 20th, 2015, the bill on accounting law
(revised) was adopted by the National Assembly of the Socialist
Republic of Vietnam with a majority of the votes.
Accounting principles: Regarding to
the accounting law, the deputy minister of finance said that one of
the most important accounting principles supplemented is the
'fair value' principle. Accounting Law 2005 only referred
to the (historical) cost principle; assets and liabilities were
therefore not reflected properly in accordance with international
The new accounting law specifies that the value of assets and
liabilities shall be recorded at cost. After initial recognition,
assets and liabilities the value of which frequently fluctuates in
accordance with the market price and could be re-assessed reliably,
shall be recorded at fair value at the end of the accounting
period. This work is technical, which results in regulations being
issued by the ministry of finance detailing the kinds of assets and
liabilities to be recorded and measured at fair value, and the
accounting methods to be applied to record and re-assess them at
Accounting areas: Only management
accounting and financial accounting are accepted according to the
new accounting law.
Electronic accounting records storage:
Entities are allowed to store electronic accounting records in
accordance with regulations on e-vouchers. In addition, entities
shall ensure convenience when checking vouchers and information
security, which will save both manpower and materials in voucher
The new accounting law also regulates the preservation and
storage of and solutions for missing accounting vouchers.
practice: The accounting
law specifies the conditions applying to the business of accounting
practice; in addition, accounting consultancies are also considered
as providing accounting services. Therefore, registration is a must
to comply with regulations.
The new accounting law specifies types of companies allowed to
providing accounting services: limited companies with 2 members and
above; partnerships and private companies. However, limited
companies have to meet several conditions to avoid risks, for
examples, need to have at least 2 CPAs, member as an organization
is allowed to contribute entity according to specific rate
regulated by the government.). A sole proprietorship shall have
limited liability to avoid risks and improve the owner's
responsibility for the services he or she provides.
According to international practice, no type of accounting firm
exists as a joint stock company.
Several additions have made to the new accounting law, including
the prohibition of the following acts in the accounting field:
preparing two systems of accounting records; renting and borrowing
accountant certificates or certificates of registration and
accounting practice. A decree specifying sanctions applicable to
the accounting field is to be issued by the state.
Accounting Law 2015 will take effect on January 1st,
2017. For financial statements of the state, the government will be
preparing the necessary conditions for state financial statements
24 months after January 1st, 2017 at the latest.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The ICDS on tangible fixed assets is based on the Accounting Standard on Accounting for Fixed Assets (AS-10) notified by The Companies Accounting Standards Rules, 2006.
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