Regulations on accounting periods and accounting principles in Vietnam

What is accounting period?

Pursuant to the Law on Accounting 2015, accounting period means a period of time from the time the accounting unit starts to make its accounting book to the time it closes the accounting book to make the financial statement.

Regulations on accounting periods and accounting principles in Vietnam (Internet image)

Regulations on accounting periods in Vietnam

Pursuant to Article 12 of the Law on Accounting 2015, regulations on accounting periods are as follows:

(1) Accounting periods include annual accounting periods, quarterly accounting periods, and monthly accounting periods. To be specific:

- An annual accounting period is 12 months from January 01 to the end of December 31. Any accounting unit, because of its difference in organizational structure or operation, that is allowed to begin the annual accounting period on the 1st of the first month of a quarter and end it on the last day of the last month of the next four quarter must notify the finance authority and tax authority.

- A quarterly accounting period lasts for 03 months from the 1st of the first month of the quarter to the last day of the last month of the quarter;

- A monthly accounting period lasts for 01 month from the 1st to the last day of the month.

(2) Accounting periods of a new accounting unit:

- The first accounting period of a new enterprise begins on the issuance date of the Certificate of Enterprise Registration and ends on the last day of the annual, quarterly, or monthly accounting period specified in Clause 1 of this Article;

- The first accounting period of another accounting unit other than a new enterprise begins on the issuance date of the decision on establishment of the accounting unit and ends on the last day of the annual, quarterly, or monthly accounting period specified in Clause 1 of this Article.

(3) Where an accounting unit is divided, consolidated, merged, converted, transferred, dissolved, shut down, or bankrupt, the last accounting period begins on the first day of the annual, quarterly, or monthly accounting period specified in Clause 1 of this Article and ends on the day preceding the effective date of the decision on division, consolidation, merger, conversion, transfer, dissolution, shutdown, or bankruptcy of the accounting unit.

(4) If the first or last annual accounting period is shorter than 90 days, it may be aggregated with the next or previous annual accounting period, respectively; the first or last annual accounting period must be shorter than 15 months.

Regulations on accounting principles in Vietnam

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

- 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 regulations above, regulatory bodies, organizations, public service agencies using state budget shall do accounting according to state budget tables.

Mai Thanh Loi

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