Accounting subjects in Vietnam under the Law on Accounting

Accounting subjects in Vietnam under the Law on Accounting (Internet image)

1. What is accounting?

According to Clause 8, Article 3 of the Law on Accounting 2015, acccounting means collection, processing, inspecting, analysis, and provision of economic, financial information in the form of value, objects, and working hours.

2. Accounting subjects in Vietnam under the Law on Accounting

Specifically, in Article 8 of the Law on Accounting 2015, the accounting subjects include:

- 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;

+ Public assets;

+ 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 Article 8 of the Law on Accounting 2015.

- Accounting subjects with regard to business operation, except for the activities specified in Clause 4 of Article 8 of the Law on Accounting 2015, 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 Article 8 of the Law on Accounting 2015;

+ Financial and credit investment;

+ Internal and external payments of the accounting unit;

+ Commitments, guarantees, valuable papers.

3. Accounting principles in Vietnam

According to Article 6 of the Law on Accounting 2015, the accounting principles are as follows:

(1)  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.

(2) 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.

(3) The accounting unit must collect, record economic/financial transactions that occur objectively, fully, truthfully, and in the correct accounting period.

(4) 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 the Law on Accounting 2015.

(5) 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.

(6) Financial statements must be made and presented in a way that correctly reflects the nature of the transactions rather than their names.

(7) Apart from cases in item (1) to (6), regulatory bodies, organizations, public service agencies using state budget shall do accounting according to state budget tables.

Thanh Rin

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