Requirements for information presented in financial statements in Vietnam

Requirements for information presented in financial statements in Vietnam (Internet image)

Regarding this issue, LawNet responded as follows:

1. Regulations on periods of financial statement in Vietnam

Regulations on periods of financial statement in Vietnam according to Article 98 of Circular 200/2014/TT-BTC are as follows:

- Periods of annual financial statements: Enterprises must prepare annual financial statements in accordance with the Law on Accounting.

- Periods of interim financial statements: Interim financial statement shall include quarter financial statements (including quarter IV) and semi-annual financial statements.

- Periods of other financial statements:

+ Enterprises may establish financial statements in accordance with other accounting periods (such as week, month, 6 months, 9 months ...) as required by law, parent companies or owners.

+ Accounting units divided, splited, amalgamated or conversed their ownership, dissolved, terminated their operation, bankrupt must prepare financial statements at the time of division, split, amalgamation or conversion of ownership, dissolution, termination of activities, bankruptcy.

- Determination of sum year of financial statements of financial and statistic agencies.

When summarizing statistics, in case of receipt of financial statements of enterprises whose fiscal year is different from calendar year, State management agencies shall comply with the following principles:

+ In case the financial statements of the enterprises begin on April 1 and end on March 31 annually, the figures on financial statements shall be summarized statistics on figures of the preceding year;

+ In case the annual financial statements of enterprises begin on July 1 and end on June 30 annually, financial statements used to summarize statistics are semi-annual financial statements;

+ In case financial statements of the enterprises begin on October 1 and end on September 30 annually, the figures on financial statements shall be summarized statistics on figures of the following year;

2. Requirements for information presented in financial statements in Vietnam

Requirements for information presented in financial statements under Article 101 of Circular 200/2014/TT-BTC are as follows:

- Information presented in the financial statements must be recorded honestly and reasonably the financial situation, trading situation and income of enterprises. To ensure honesty, the information must be complete, objective, unmistaken.

+ Information is only complete when including all the necessary information to help users of financial statements to understand the nature, forms and risks of transactions and events. For some items, the full presentation must also describe more information about the quality, the factors and circumstances that may affect the quality and nature of the items.

+ Objective presentation is unbiased selection or description on financial information. Objective presentation must ensure neutrality which do not focus, emphasis or reduce as well as perform other acts to alter the impact of the financial information to become beneficial or unbeneficial for users of financial statements.

+ No errors mean no omissions in the description of the phenomenon and no errors in the process of providing reporting information selected and applied. No errors do not mean complete accuracy in all respects, for example, estimating unobservable cost and value is difficult to determine to be correct or incorrect. The presentation of an estimate is considered to be honest, if the estimated value is described clearly, and the nature and limitation of the estimating process is explained and there is no error in the selection of appropriate figures in the estimate.

- Financial information must be appropriate to help users of financial statements to predict, analyze and make economic decisions.

- Financial information must be presented fully in all important respects. Information is considered to be important in case information is not sufficient or inaccurate information may affect the decisions of users of financial information of the reporting unit. Materiality shall be based on the nature and magnitude, or both, of the relevant items presented in the financial statements of a particular unit.

- Information must be verifiable, timely and understandable.

- Financial information must be presented consistently and must be comparable among the accounting periods and enterprises.

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