[News Brief] Draft Circular on the Application of IFRS in Vietnam

The Ministry of Finance is drafting a Circular providing guidance on the subjects and modalities for applying International Financial Reporting Standards (IFRS) in Vietnam. Accordingly, the Circular is expected to take effect from 01 January 2027, and the first IFRS financial statements prepared by voluntarily adopting entities are expected to commence from financial year 2028.

1. Proposed subjects of application

The following enterprises and economic organizations that have sufficient capability, resources, and demand to apply International Financial Reporting Standards may elect to apply IFRS in preparing and presenting financial statements and consolidated financial statements:

• Enterprises and economic organizations that are members of the International Financial Centre in Vietnam, falling within the scope of application of Resolution No. 222/2025/QH15 of the National Assembly on the International Financial Centre in Vietnam and relevant guiding, amending, supplementing, or replacing documents.

Including:

• Banks
• Investment funds
• Financial technology and digital asset organizations
• Non-financial organizations
• Other entities as prescribed by the Government

• Foreign direct investment (FDI) enterprises

2. Modalities of application

• Apply in full all IFRSs that are effective at the reporting date;
• Apply IFRS consistently for at least one annual accounting period;
• Apply IFRS 01 (First-time Adoption of IFRS) regarding comparative information and other required disclosures when an enterprise prepares IFRS financial statements for the first time;
• Independently develop financial statement formats and determine the chart of accounts and accounting methods, while ensuring that the substance of transactions is faithfully represented and that accounting principles and the requirements of IFRS are complied with;
• Fully comply with other provisions of Vietnamese accounting law;
• Entities that elect to apply IFRS are not required to prepare financial statements under VAS;
• Financial statements prepared under IFRS constitute the entity’s statutory financial statements, which may be used for submission to competent authorities and for public disclosure in accordance with law.

3. Reporting periods and submission of reports

• Enterprises and economic organizations applying IFRS must prepare and submit financial statements and consolidated financial statements in accordance with current Vietnamese accounting regulations and information disclosure requirements.
• The recipients of financial statements and consolidated financial statements shall be determined in accordance with the Vietnamese Enterprise Accounting Regime.

4. Responsibilities of enterprises

• Publicly disclose their responsibility before the law for the decision to apply IFRS;
• Notify the Ministry of Finance and tax authorities in writing at least 30 days prior to the commencement date of IFRS application;
• Provide explanations to competent authorities, upon request, regarding differences between accounting profit and taxable income.

For more detailed consultation, TPM’s experts are ready to provide appropriate support.

📩 Contact:

Van Le – Head of Tax Advisory

T: +84 916 777 662

E: van.le@tpm.com.vn

Or TPM Hotline: +84 28 3505 1800