Accounting activities are very important to business of any enterprises. It is necessary to learn and understand how the laws regulate accounting in Vietnam. What are accounting principles prescribed by Vietnam law? What are Accounting standards and codes of ethics for accountants? Let’s find out through this article with Lawyer X! Hope that you will find the answers you are looking for!
Legal grounds
2015 Vietnam Law on Accounting
Regulations on Accounting objectives
– Collecting, processing accounting information and data according to subjects and contents of accounting works, accounting standards and accounting regime.
– Inspecting, supervising revenues, expenditures, debts; inspecting the management, use of assets and sources of assets; discovering and preventing violations against regulations on finance and accounting.
– Analyzing accounting information and data; advising, proposing solutions for resolving administrative requirements and making of economic, financial decisions of the accounting unit.
– Providing accounting information and data as prescribed by law.
Regulations on Accounting requirements
– All economic/financial transactions are fully recorded into accounting records, accounting books, and financial statements.
– Accounting information and data are recorded in a timely manner.
– Accounting information and data are recorded in a clear, understandable, and accurate timely manner.
– Status, nature, contents, and value of economic/financial transactions are recorded truthfully and objectively.
– Accounting information and data must be continuously recorded from the beginning to the end of every economic, financial activity, from the establishment to the shutdown of the accounting unit; the accounting data of a period must continue that of the previous period.
– Accounting information and data are classified and sorted systematically in a way that can be compared and verified.
Regulations on accounting principles
– Values of assets and liabilities must be recorded according to their original prices. After being initially recorded, regarding certain types of assets and liabilities whose values fluctuate according to market prices and can be reliably re-determined according to reasonable values at the end of the financial statement period.
– Chosen regulations and accounting method must be consistently applied throughout the fiscal year; where the chosen regulations and accounting method are changed, the accounting unit must provide explanation in its financial statement.
– The accounting unit must collect, record economic/financial transactions that occur objectively, fully, truthfully, and in the correct accounting period.
– Every financial statement must be completely, accurately, made and sent to competent authority in a timely manner. Information and data in financial statements of accounting units must be made publicly available in accordance with Article 31 and Article 32 of this Law.
– Accounting units shall apply methods for evaluation of assets, distribute the revenues and expenditures carefully; do not falsify the results of their economic, financial activities.
– Financial statements must be made and presented in a way that correctly reflects the nature of the transactions rather than their names.
– Apart from Clause 1 through 6 of this Article, regulatory bodies, organizations, public service agencies using state budget shall do accounting according to state budget tables.
Accounting standards and codes of ethics for accountants
– Accounting standards comprise the basic accounting methods and regulations for making financial statements.
– Code of ethics for accountants comprises regulations and instructions on principles, application of the code of ethics to accountants, accounting practitioners, enterprises and households providing accounting services.
– The Ministry of Finance shall provide for accounting standards and codes of ethics for accountants based on international accounting standards and Vietnam’s conditions.
Regulations on Accounting subjects
– Accounting subjects with regard to revenues, expenditures of state budget, administrative operation; operation of units and organizations using state budget include:
+ Money, supplies, and fixed assets;
+ Budgets, funds;
+ Internal and external payments of the accounting unit;
+ Revenues, expenditures, and settlement of difference between revenue and expenditure;
+ Revenues, expenditures, and surplus of state budget;
+ Financial, credit investment by the State;
+ Debt and settlement of public debt;
+ Other property, assets, and liabilities related to the accounting unit.
– Accounting subjects with regard to operation of units and organizations that do not use state budget include assets and sources of assets specified in Point a, b, c, d, and I Clause 1 of this Article.
– Accounting subjects with regard to business operation, except for the activities specified in Clause 4 of this Article, include:
+ Assets;
+ Liability and owner’s capital;
+ Revenues, operating cost, incomes, and other cots;
+ Taxes and amounts payable to state budget;
+ Business outcome and distribution thereof;
+ Other property, assets, and liabilities related to the accounting unit.
– Accounting subjects with regard to the fields of banking, credit, insurance, securities, and financial investment include:
+ The subjects specified in Clause 3 of this Article;
+ Financial and credit investment;
+ Internal and external payments of the accounting unit;
+ Commitments, guarantees, valuable papers.
Financial accounting, administrative accounting, general accounting, detailed accounting
– Accounting works of an accounting unit include financial accounting and administrative accounting.
– When doing financial accounting and administrative accounting, the accounting unit must also do general accounting and detailed accounting as follows:
+ General accounting involves collection, processing, recording, and provision of general information about economic and financial activities of the accounting unit. General accounting uses currencies to reflect assets, sources of assets, status and outcomes of economic and financial activities of the accounting unit. General accounting is done based on information and data of detailed accounting;
+ Detailed accounting involves collection, processing, recording, and provision of detailed information in the form of currencies, objects, and working hours of each particular accounting subject of the accounting unit. Detailed accounting is meant to illustrate general accounting. Detailed accounting data must be consistent with general accounting data in an accounting period.
– The Ministry of Finance shall provide guidance on application of administrative accounting to each field.
Regulations on Units for accounting
– The accounting currency is Vietnam dong; its Vietnamese symbol is “đ” and international symbol is “VND”. Where an economic/financial transaction in a foreign currency occurs, the accounting unit must record the foreign currency and VND at the actual exchange rate, unless otherwise prescribed by law; if there is not exchange rate between the foreign currency and VND, it shall be exchanged into another foreign currency that has an exchange rate with VND.
An accounting unit whose most revenues and expenditures are in a foreign currency may use such foreign currency as the accounting currency and has to take legal responsibility for such action and notify its supervisory tax authority. When making a financial statement which is used in Vietnam, the accounting unit must convert the foreign currency into VND at the actual exchange rate, unless otherwise prescribed by law.
– Items and working hours used as units for accounting are legal units of measurement of Socialist Republic of Vietnam; Where an accounting unit uses another unit of measurement, it must be converted into a legal unit of Socialist Republic of Vietnam.
– Accounting units are allowed to round numbers, use abbreviated units when making or publishing their financial statements.
– The government shall elaborate and provide guidance on implementation of this Article.
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Frequently asked questions
Accounting means collection, processing, inspecting, analysis, and provision of economic, financial information in the form of value, objects, and working hours.
Financial statement means a system of financial information of an accounting unit demonstrated according to a form provided for by accounting standards and accounting regime.
Accounting documents and data are the basis for formulating and approving plans, estimates, financial statements, and evaluation of violations.
Conclusion: So the above is General legal regulations on accounting in Vietnam . Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
