Transcript Improving Financial Accountability Project Training of

S & S NEWS LETTER FOR
2010 OCTOBER
Part 2
VAS
IN COMPARISON With
IAS/IFRS
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NON-ISSUED VIETNAMESE ACCOUNTING
STANDARDS
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VAS "First time Adoption of IFRS”
VAS "Share-based payment
VAS
"Non-current assets held for sale and
discontinued operations"
VAS "Exploration for and evaluation of mineral
resources”
VAS "Financial instruments: Recognition and
Measurement
VAS "Financial instruments: Presentation
VAS "Financial instruments: Disclosures
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NON-ISSUED VIETNAMESE ACCOUNTING
STANDARDS
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VAS "Employee benefits"
VAS "Accounting for Government grants disclosure of
Government assistance”
VAS "Accounting and reporting by retirement benefit plans"
VAS "Financial reporting in hyperinflationary economies"
VAS "Impairment of assets"
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VAS "Agriculture"
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OVERVIEW OF DIFFERENCES BETWEEN
VAS AND IAS-IFRS
Overview of
differences between VAS and IAS-IFRS
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Quantity of standards : 26 VASs - 37 lASs and IFRSs
 Mainly difference: Cost and fair value method
 Causes of difference:
 Level of economy;
 Administrative degree;
 Controlled ability;
 Active market.
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INSIGNIFICANT DIFFERENT
COMPARISON WITH IAS/IFRS
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VAS
IN
Insignificant different Standards
Standard "Provisions, contingent liabilities and contingent
assets"
Standard "Insurance contract"
Standard "Events after the reporting period"
Standard "Interim financial reporting"
Standard "Earnings per share"
Standard "Operating segments"
Standard "Related party disclosures“
Standard "Accounting policies, changes in accounting
estimates and errors"
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VAS 01: GENERAL STANDARD - FRAMEWORK
Main differences
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Accounting Principles and underlying assumptions
 Cost and other methods
 Accrual basis, going concern and substance over form
 Measurement of the elements of financial statements
Historical and current cost, present and realizable values
 Concepts of capital and capital maintenance
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INVENTORY (VAS 02 - IAS 02)
Main differences
 Scope
 Cost of inventory
 Cost method
 Retail method
 Cost formulas of inventory
 Specific identification cost
 First-in, first-out(FIFO)
 Weighted average cost
 Net realizable value
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PROPERTY, PLANT AND EQUIPMENT
(VAS 03 - IAS 16)
Main differences
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Scope
 Initial recognition - Elements of cost:
The initial estimate of the costs of dismantling and removing the
asset and restoring to the site on which it is located should be
include in the cost of fixed assets
 Measurement after recognition
Cost and Revaluation models
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INTANGIBLE ASSETS (VAS 04 - 1AS 38)
Main differences
Scope
 Definitions:
Impairment loss
 Initial Recognition and measurement:
Land use right
 Measurement after recognition:
Cost and revaluation models
 Disclosure
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INVESTMENT PROPERTY (VAS 05 - IAS 40)
Main differences
 Initial recognition
 Measurement after initial recognition
 Cost model
 Fair value model
 Transfers
 Disposals
 Disclosure
 Cost model
 Fair value model
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LEASES (VAS 06 - IAS 17)
Main differences
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Accounting treatment in the financial statement of lessees financial leases
 Accounting treatment in the financial statements of lessees operating leases
 Accounting treatment in the financial statements of lessons financial leases
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INVESTMENT IN ASSOCIATES (VAS 07 - IAS 28)
Main differences
 Scope
 Separate and consolidate financial statements
 Cost method or in accordance with IAS 39
 Equity method
 Discontinue the use of the equity method
 Transactions between an investor and an associate
 Initial recognition
 Allocation of differences between Net book value and fair value
of net identified assets
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INTERESTS IN JOINT
(VAS 08 - IAS 31)
VENTURES
Main differences
 Scope
 Definitions: Proportionate consolidation
 Separated financial statements of a venture
Cost method or in accordance with IAS 39
 Consolidated financial statements of a venture Proportionate
consolidation or equity method
 Exceptions to proportionate consolidation and equity method
• Operators of joint ventures
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THE EFFECTS OF CHANGES IN FOREIGN
EXCHANGE RATES (VAS 10 – IAS 21)
Main differences
 Scope
 Except to the extent that relates to IAS 39
 Arising from applying proportionate consolidation
 Functional currency
 Functional currency and accounting currency
 Change in functional currency
 Reporting foreign currency transactions in the fictional
currency (recognition of exchange difference)
 Tax effects of all exchange differences
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BUSINESS COMBINATION (VAS 11 - IFRS 03)
Main differences
Structure of standard
 Exceptions to both recognition and measurement principles
Income taxes; Employee benefits; Indemnification assets
 Exceptions to both recognition and measurement principles
Reacquired rights; Share-based payment awards; Assets held for
sale
 Accounting for goodwill
Impairment test of goodwill or Amortization of goodwill
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VAS14 REVENUE AND OTHER INCOMES IAS 18: REVENUE
Main differences
 Scope
 Other incomes
Examples of Other incomes:
 Gains from fixed assets disposal;
 Tax refunds;
 Compensations received from insurance company;
 Punishment received from customer for contract violation;
 Recovery from written off bad debts;
 Other incomes...
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CONSTRUCTION CONTRACT (VAS 15 IAS 11)
Main differences
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Recognition of contract revenue and expenses
 Stage of completion method
 Progress payments method
 Amount of work completed method
 Recognition of expected losses
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BORROWING COSTS (VAS 16 - IAS 23)
Main differences
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Scope
 Definitions: Elements of Borrowing costs
The borrowing costs may include the exchange differences
arising from foreign currency borrowings to the extent that
they are regarded as an adjustment to interest costs
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INCOME TAXES (VAS17 - IAS12)
Main differences
 Tax base
 Recognition of deferred tax liabilities and assets
 Business combinations
 Assets carried at fair value
 Goodwill
 Initial recognition of an asset or liability
 Measurement
 Deferred tax arising from a business combination
 Current and deferred tax arising from share-based payment
transactions
 Presentation
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PRESENTATION OF FINANCIAL
STATEMENTS (VAS21 - IAS01)
Main differences
 Complete set of financial statements
 Form of statement of comprehensive income for the period
 Statement of changes in equity for the period
 Statement of financial position as at the beginning of the
earliest comparative period when an entity applies an
accounting policies retrospectively or makes a retrospective
restatement of items in its F/S or when it reclassifies items in
its F/S
 Reporting period
 Maturity date of assets and liabilities
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STATEMENT OF CASH FLOWS
(VAS 24 - IAS 07)
Main differences
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Investing activities
Cash flows from derivatives
Taxes on income
 Investments in subsidiaries, associates and joint ventures
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CONSOLIDATED
AND
SEPARATE
FINANCIAL STATEMENTS S 25 - IAS 27)
Main differences
• Presentation of consolidated financial state!
• Scope of consolidated financial statements
• Consolidation procedures
• Loss of control
• Accounting for investments in subsidiaries, jointly controlled
entities and associates in separate financial statements
+ Cost method
+ In accordance with IAS 32
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