Vietnam to adopt international financial reporting standards by 2025
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Financial statements prepared under the new standards will give investors better insight into how companies perform. Vietnam will join most of the world by adopting the International Financial Reporting Standards (IFRS) by 2025 to improve transparency and boost investment.
The decision was announced by officials at a seminar in Hanoi late last week.
Vu Duc Chinh, director of the Accounting and Auditing Policies Department, said Vietnam has its own accounting standards but there are shortcomings and inconsistencies that hinder foreigners from investing in the country.
Financial statements prepared under the international standards will give investors better insight into how a company actually performs, officials said.
Globally, over 90 percent of all countries have publicly confirmed adoption or already followed the standards.
It normally takes quite a long time before a country completes its transition to the new rules.
“Adopting IFRS in a comprehensive and complete way often takes five to 10 years, depending on financial conditions of each country,” said Chris Fabling, senior financial management specialist at the World Bank.
Under the current roadmap, the standards will be gradually rolled out and applied by 2020, with listed companies as the first group to be subjected to the rules. By 2025, all companies in the Vietnam will have to follow the new standards.
Questions & Answers
Q.Why is Vietnam adopting international financial reporting standards?
Why is Vietnam adopting international financial reporting standards?
Vietnam is adopting IFRS to improve transparency and attract more investment from abroad. Current accounting standards have shortcomings and inconsistencies that hinder foreign investment, and the new standards will offer investors better insight into company performance.
Q.When will the new financial reporting standards be fully implemented?
When will the new financial reporting standards be fully implemented?
The new standards will be gradually rolled out, starting with listed companies by 2020. By 2025, all companies operating in Vietnam will be required to follow these new international standards, completing the full transition.
Q.Who announced the decision to adopt IFRS?
Who announced the decision to adopt IFRS?
Officials announced the decision at a seminar held in Hanoi late last week. Vu Duc Chinh, director of the Accounting and Auditing Policies Department, provided further details regarding the move to IFRS.
Q.How long does a transition to IFRS typically take?
How long does a transition to IFRS typically take?
Transitioning to IFRS fully often takes between five and 10 years. The exact duration depends on the financial conditions within each country, according to Chris Fabling from the World Bank.
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