SUBJECTS, SCOPE AND MODE OF APPLICATION OF INTERNATIONAL ACCOUNTING STANDARDS IN VIETNAM

On August 18, 2026, the Ministry of Finance issued Circular No. 118/2026/TT-BTC guiding the subjects, scope and mode of application of International Standards on Accounting in Vietnam. This Circular officially takes effect from January 1, 2027 and applies to the fiscal year starting from or after January 1, 2027. Here are some important contents that businesses need to pay attention to:

1. Subjects of application

Enterprises and economic organizations that are members of the International Financial Center in Vietnam that have the needs, capabilities and resources are selected to apply international standards on accounting to prepare and present financial statements and consolidated financial statements.

2. Procedures for application of International Standards on Accounting

• Applying the prototype and without any adjustment of the provisions of the International Standards on Accounting in force;
• Applied consistently in a fiscal year, the application or cessation of the application of International Accounting Standards shall only be carried out on the start date of the accounting period of the following year.

3. Recipient, reporting period and deadline for submission of reports

• Recipients: Executive Agencies, Supervisory Agencies and Competent Authorities of Vietnam.
• Reporting period and deadline for submission of reports: Comply with the provisions of Vietnam’s accounting law. Financial statements and consolidated financial statements made in accordance with international accounting standards shall be used to send to functional agencies and publicize financial statements and consolidated financial statements in accordance with law.

4. Responsibilities of enterprises when applying International Accounting Standards

• It is necessary to ensure the provision of sufficient information and clear and transparent explanations to tax authorities, management and supervision agencies.
• Must declare compliance with international accounting standards in the Notes to financial statements and consolidated financial statements.
• A written notice must be sent to the Ministry of Finance within 30 days before the date of application or cessation of the application of International Accounting Standards.