Regulations on accounting currency in Vietnam

Regulations on accounting currency in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Accounting principles in Vietnam

According to Article 6 of the Law on Accounting 2015, the principles in accounting include:

(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 (1), (2), (3), (4), (5) and (6), regulatory bodies, organizations, public service agencies using state budget shall do accounting according to state budget tables.

2. Regulations on accounting currency in Vietnam

Specifically, in Article 4 of Decree 174/2016/ND-CP, the regulations on accounting currency in Vietnam are as follows:

- 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 no 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.

The exchange rate between a foreign currency and accounting currency in financial statements shall follow instructions of the Ministry of Finance, unless otherwise prescribed by law.

- State accounting units shall convert revenues and expenditures in foreign currencies into VND in accordance with the Law on State budget.

- Unit of products and working time in accounting include tonne, quintal (100 kilograms), kilogram, square meter, cube meter, working day, working hour and other units of measurement defined by measurement laws.

- When an accounting unit consolidates financial statements of its subsidiaries or affiliated units or when a superior state accounting unit consolidate financial statements or budget statements of its inferior units, the abbreviated currency used on the consolidated statement may be:

+ 1,000 dong if at least one entry thereon consists of 9 digits or more;

+ 1 million dong if 12 digits or more;

+ 1 billion dong if 15 digits or more.

- When publishing a financial statement or budget statement, the abbreviated currency specified in Clause 4 of this Article may be used.

- When using an abbreviated currency, decimals may be rounded up if greater than or equal to 5.

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