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VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL

RATIONATE

1. Project name: Differences between IFRS and VAS: 2. Code:

the case of Thailand and Vietnam.

3. Principal Investigator
Full name: Lương Vân Trang Class : AC2016B

4. List of member
Full name Positon Signature

Nguyễn Thị Ngọc Ánh AC2016B

Nguyễn Thị Ca AC1016C
Đinh Thủy Chi AC2016C
Lương Vân Trang AC2016B

5. Instructor
Full name : Nguyễn Trà My Title: MSc
Research field: Accouting
6. Necessity
Aligning with the trend of global economic integration, International Financial Reporting
Standards (IFRS) are increasingly getting the support of many countries in the world. The
application of IFRS in financial statements help enhance the transparency of financial
information, especially in the case listed companies and multinational corporations. IFRS aslo
helps enhance comparability and understandability, which gear companies towards international
integration in attracting foreign capital. Currently, besides having become a member of many
international organizations such as the WTO, IMF, joining ASEAN FTA, APEC, CEPT, ACE,
Vietnam is also in the process of adopting IFRS. The Ministry of Finance plans to do so by 2025.
Therefore, it is of utmost importance for regulators, practitioners, students, among others, to
understand the differences between IFRS and VAS in order to brace the upcoming challenges that
come with the adoption. This paper investigates those differences, but in a different light than
many other research paper – that is, comparing Vietnam to a country with similar political and
economic situation which has already adopted IFRS in order to see if lessons can be learned for
Vietnam.
7. Literature review
7.1 Basic differences between IFRS and VAS
- The IFRS/IAS is “a set of accounting standards, developed by the International Accounting
Standards Board (IASB) that is becoming the global standard for the preparation of public
company financial statements” (Mybizfiler, 2008).
Vietnam uses IFRS as a basis for its own system, the Vietnamese Accounting Standards
(VAS).
- According to Dezan Shira & Associates (a specialist foreign direct investment practice that
provides advisory services to multinationals investing in emerging Asia) figure out that the
key differences between IFRS and VAS are terminology, applied methods and presentation
scope.
- The basic distinction between IFRS and VAS is on presentation of Financial Statements.
To IAS 1, a complete part of financial statements include :
 Balance Sheet
 Income Statement
 Cash Flow Statement
 Statement of Changes in Equity.
 Notes, including a summary of significant accounting policies and other notes.
The components of financial statements of VAS are:
 Balance Sheet
 Income Statement
 Cash Flow Statement
 Notes.
In IFRS, Statement of Changes in Equity is a separate part while it is a part of Notes in
VAS (According to VAS 21).
- Due to lack of implementing guidance in Vietnam, most business still have the other
methods or use these methods that are not common in IFRS to calculate inventory, tangible
fixed assets, etc. For example, the basic differences of calculation in Inventories between
IFRS and VAS are:
IFRS VAS
Calculation of production Use the normal costing. Most of business still
costs. calculate production costs
based on actual costs.
Method to calculation. LIFO* is not allowed to Use LIFO in order to
calculate the inventory calculate.
valuation.

*LIFO, which stands for last-in-first-out, is an inventory valuation method which assumes
that the last items placed in inventory are the first sold during an accounting year (Jean
Murray, 2018).
7.2 Comparison of Thailand and Vietnam
7.2.1.Similarities
Vietnam and Thailand have many similarities in terms of economics, culture and politics.
- Economics
 About economic, both countries are derived from agriculture. Thailand is the world
leader in rice export, the second largest exporter of rice in Vietnam, continue to be
traced into the new business and the following countries business development.
- Culture
 Vietnam and Thailand do not have official state religion in the constitution,
guaranteeing religious freedom for all citizens, but the main religion practiced in
Thailand is Buddhism.
 According to official census data over 90% of Thais follow Buddhism. However,
the religious life of the country is more complex than Vietnam.
- Politics
 Despite many similarities, the politics of Vietnam and Thailand are quite different.
- Religion
 Thailand is more religious than Vietnam, so the religion in here is very developed,
especially Buddhism. But in general, Vietnam and Thailand are two Asian countries
that have a lot in common. So the selection of Thailand to compare with Vietnam is
very justified as reasonableappropriate.
7.2.2.Differences
 Accounting standards
- In Thailand, in order to increase the competitiveness of Thailand's stock market, Thailand's
TAS with IFRS started in 2007. In 2011, the latest version of TAS and TFRS was issued.
Since 1 January 2014, the accounting standards used, Thai Financial Reporting Standards
(TFRS), is identical to the 2012 version of IFRS (IFRS Foundation 2016g).
- Thailand is currently in the process of adopting IFRS as TFRS in full, with some action
plans made accordingly. It expects only a one-year gap between the IFRS effective date
and the adoption, due to the need to translate IFRS into the Thai language. However, there
are some local GAAP standards hence incomparable to IFRS. Also, it is the process of
adopting accounting standards for SMEs which is identical to the IFRS for SMEs (2015
amendment), effective in 2017.
- The International Accounting Standard (IFRS) has been introduced in Thailand since 1997
with the plan of full adoption in 2011 for the 50 largest companies listed in the Stock.
Exchange of Thailand (SET). During the convergence process, however, some new
standards have been postponed and many impractical issues have presented themselves.
7.3.Literature Gap
- This study aims to identify the major factors that stand as barriers to IFRS harmonization
in Thailand and provide policy recommendations to reach the convergence goal in
Vietnam, which has not yet been studied before.
- To analyze the accounting environment in Thailand together with the case studies of the
past success in other countries, this study utilized the research of Zeff (2007) and Wunder
(2004) and the Logical Framework.
- The result of the analysis reveals that the principle causes of difficulties are the business
cultures, which are lacking in fair value reference, and the stage of economic development,
which is relatively low compared to other IFRS countries. These two obstacles can be
overcome by market forces and the cooperation between business entities, government
agencies, and professional bodies.
 So that, we can have a huge number of experiences and plan to apply IFRS to
Vietnam.
8. Objectives
- The general objective of the study is to understand the differences of IFRS and VAS based
on analyzing the accounting standard of Thailand and Vietnam. The specific objectives
are:
- Learn about IFRS and VAS.
- Figure out the difficulties and benefits that IFRS brings to Thailand.
- Develop and improve knowledge about accounting standards in general.
- Demonstrate the ability to present a new problem.
- Given the roadmap for Vietnam to apply reasonably.
- Propose possible recommendations for Vietnam to adopt IFRS most effectively.

9. Method, Scope of study

9.1. Methods
- Archival and content analysis of literature and company data
9.2. Scope of study
- In 2 nations: Thailand and Vietnam.

10. Procedures

Contents Time Expected result

Searching and reading the documents Overview about the IFRS and VAS:
related to the research 12/2018 basic information.

Analyzing the differences between Get the differences in general.

IFRS and VAS 1/2019

Finding out the distinction between Get the distinction in detail.

IFRS and VAS in case of 2-3/2019
Thailand and Vietnam.
Writing a final report A final report
4/2019
Ha Noi, Date:…16/11/2018………
Principal Investigator Office of Research and Partnership
Development

Instructor International School