Name: Nguyễn Quốc Tiến Student code: 11203924

1. Status of application of International Financial Reporting Standard (IFRS)

around the word.
Countries around the world are increasingly interested in and applying IFRS to
its full extent or with the necessary modifications so that the financial statements of
the institutions of each country are widely accepted and comparable with global
financial reporting. Currently, in the world, there are 144 countries (accounting for
86.8%) that apply IFRS to most joint stock companies listed on the stock market and
financial institutions that are required to disclose information, 86 countries (52%)
requesting or allowing the application of IFRS for small and medium-sized
enterprises. To be specific, the following table shows detail information in applying
IFRS across the world.
The transition to IFRS adoption is becoming more and more common.
However, the views on how to approach IFRS vary from country to country.
Basically, it can be seen that there are approaches to IFRS as follows:
 IFRS is a mandatory regulation: There is convergence of domestic accounting
standards with IFRS. Domestic accounting standards will be fully applied in
accordance with IFRS principles. This approach is temporary globally, with
about 144 countries and territories adopting IFRS, accounting for 87% of the
total.
 IFRS as an option: In some countries, both IFRS and domestic accounting
standards are available. IFRS has been adopted, often this approach exists in
countries in the process of transition to IFRS.
Religion Total Total countries that Total countries that Total countries
countries require mandatory allow the option of that apply their
use of IFRS for using IFRS for GAAP
listed companies listed companies
European 44 43 1 0
Africa 38 36 1 1
Middle East 13 13 0 0
Oceania 34 25 3 7
America 37 27 8 2
Total 166 144 12 10
Proportion 100% 86,8% 7,2% 6%
(Source: Analysis of IFRS and IASB records)
As seen from the table, IFRS is increasingly being applied in many regions,
many countries and many international organizations. The striking feature is that
European (EU) has the most counties applying IFRS as their accounting system.
 a) IAS/IFRS in the European Union
In July 2002, the EU issued a directive (Regulation 1606/2002) requiring all listed
companies of member states to prepare consolidated financial statements based on
IFRS beginning January 1, 2005. The aim was to improve the quality of corporate
financial reporting by increasing their comparability and transparency and to promote
the development of a single capital market in Europe. Nonlisted companies continue
to apply national GAAP.
IAS 39, Financial Instruments: Recognition and Measurement, with two “carve
outs was the first IAS that appled for EU. However, this standard didn’t give a good
response for some reasons.
Starting in 2005, although the European Union now has a single financial
reporting standard-setter, securities regulation is subject to considerable cross-
jurisdictional variation due to existing legal and cultural differences among EU
jurisdictions. As a result, EU countries have decided to evaluate existing enforcement
strategies and introduce enforcement bodies.
In September 2009, the EU published Commission Regulation (EC) No. 839/2009
(Adoption of Eligible Hedged Items—Amendments to IAS 39 Financial Instruments:
Recognition and Measurement), amending Regulation (EC) No. 1226/2008, adopting
certain international accounting standards in accordance with Regulation (EC) No.
1606/2002.
b) IAS/IFRS in the United States
In November 2007, the SEC decided to remove the requirement considered that
foreign private issuers using IFRS reconcile their financial statements to U.S. It was
issued in 1996. This reflects the recognition that IFRS is a high-quality set of
accounting standards that is capable of ensuring adequate disclosure for the protection
of investors and the promotion of fair, orderly, and efficient markets.
However, for public company, domestic filers do not have the option of preparing
their financial reports in accordance with IFRS even thought the SEC issued a concept
release soliciting public comment on the idea of allowing U.S. companies to choose
between the use of IFRS and U.S in July, 2007.
In November 2008, the SEC issued a rule called “Roadmap for the Potential Use
of Financial Statements Prepared in Accordance with International Financial
Reporting Standards (IFRS) by U.S. Issuers. In addition, in this year, The AICPA
announced in May 2008 that private companies were allowed to adopt IFRS ahead of
publicly traded companies. This gave AICPA members the option to conduct audits in
line with IFRS as an alternative to U.S. GAAP. As a result, U.S.-based private
companies that were subsidiaries of foreign parent companies using IFRS were
allowed to adopt IFRS in their audited financial statements.
 In February 2010 the roadmap was revisited and the SEC staff released a statement
outlining a work plan to evaluate the impact that IFRS would have on the U.S.
financial reporting system. Although it is still not known what date the Commission
will set, and whether it will set a date at all, for public companies to make the
mandatory or voluntary switch from U.S. Generally Accepted Accounting Principles
(U.S. GAAP) to IFRS, the IFRS have a real impact on an ever growing number of
U.S. companies, public and private. Some companies are required to report, under
IFRS, to meet the reporting requirements of an international parent or investor
company. Also, U.S. companies have foreign subsidiaries that must report according
to IFRS, and some have operations in jurisdictions where IFRS is mandatory.
Furthermore, U.S. companies may recognize the need to voluntary supplement their
U.S. GAAP-based financial statements with IFRS-based reports to allow for an
accurate comparison with foreign competitors.
Most recently, the SEC’s Strategic Plan for Fiscal Years 2014–2018 stressed that
“the SEC will continue to promote the establishment of high-quality accounting
standards in order to meet the needs of investors. However, at present, even though all
the joint IASB/US Financial Accounting Standards Board (FASB) projects are
complete or nearing their completion, the convergence of IFRS and US. GAAP has
not been achieved.
c) Statue of applying IFRS/IAS in some Asian nations.
 Korea
Korea is a typical country that has successfully implemented IFRS according to the
applied approach completely after 04 years from the time the IFRS application
roadmap is announced. In 2016, Korea was assess the impacts from the application of
K-IFRS, and show the positive impacts from the activities international sponsorship
for companies in Korea.
 Singapore
Since 2002, Singapore has issued Singapore Financial Reporting Standards (SFRS)
based on on the basis of IFRS, applicable to businesses listed on the Singapore
Exchange. General, Singapore had a lengthy review process for applying IFRS from
2002 to 2014. During the period In this regard, Singapore has not yet fully applied the
IFRS right away, but has made appropriate amendments and only applies it first for
listed companies, then for other companies. Presently Today, Singapore is using the
Singapore Financial Reporting Standards, although not 100% equivalent to IFRS but
still a number to a significant degree (95%). Therefore, the full application of IFRS
will not be too big a hindrance for Singapore in the future.
 Thailand
In 2006, the Federation of International Accountants (FAP) and the Securities
Commission of Thailand signed a commitment to comply with international
 accounting standards and comply with IFRS. In 2007, Thai Lan issues Accounting
Standards applicable to non-enterprises public as private enterprises. In the two
years 2008 - 2009, Thailand made a move accelerate the transition such as issuing
more manuals on the use of the accounting framework new, adjusted accounting
standards according to IFRS and named it TFRS. FAP plans to implement IFRS
the first leg since 2011 when the Stock Exchange of Thailand (SET) promoted the
first audience IFRS compliance style is 50 public enterprises.
2. Applying IFRS in Vietnam: Statue and Guideline
a) The statue of applying IFRS
Along with the globalization trend of economic cooperation and development,
accounting is no longer an internal and separate issue of each country. Therefore, to
suit the diverse needs of businesses as well as investors, countries often allow
businesses to choose ISA or IFRS when preparing and presenting financial statements.
The application of IFRS in Vietnam is an inevitable trend because the current
Vietnamese Accounting Standards (VAS) have revealed many limitations and have
not yet made appropriate adjustments to keep up with the development speed of the
economy. economy in the current period.
According to the strategy of accounting - auditing to 2020, vision to 2030
approved by the Prime Minister in Decision No. 480/QD-TTg, the Ministry of
Finance has always paid attention to update and supplement accounting standards in
line with the IFRS, especially the accounting standards of the developed economy and
associated with the characteristics of the Vietnamese economy.
b) The guideline of applying IFRS
 Period 1 (2022 – 2025): Select a few large enterprises with sufficient resources
to pilot IAS/IFRS, others still apply under VAS
Subjects of application
- Some parent companies of large-scale state-owned economic groups have loans
from the World Bank and the international monetary fund guaranteed by the
Government.
- Some listed companies are large-scale parent companies with capital raising
activities in the form of issuing bonds to the international market or planning to list on
the international market.
- Some foreign-invested enterprises of multinational corporations are not subject to
tax risks.
 Period 2 (2025 – 2030): Expand the scope of application in the direction of
allowing eligible businesses to choose to apply VAS or IAS/IFRS
Subjects of application
- Some state-owned parent companies have registered to choose to apply IAS/IFRS
- Listed companies and public companies that are parent companies register to choose
to apply IAS/IFRS
- Other businesses wishing to apply IAS/IFRS
- Foreign-invested enterprises of multinational corporations are not subject to tax risk
 Period 3 (After the year 2030): Specifying the mandatory and voluntary
subjects to prepare financial statements according to IAS/IFRS
For the madatory subjects
- All state-owned enterprises with charter capital of 5,000 billion VND or more
- All listed companies in stock market
- All public companies in the financial, banking and insurance sectors
- All other public companies with charter capital of VND 3,000 billion or more
For the voluntary subjects
- All enterprises that are not required to apply IAS/IFRS and are not subject to tax
risks if there is a need to apply IAS/IFRS instead of VAS to prepare separate financial
statements and Consolidated financial statements.