News

CIRCULAR 118/2026/TT-BTC GUIDING THE ELIGIBLE ENTITIES, SCOPE AND MODALITIES FOR APPLICATION OF INTERNATIONAL ACCOUNTING STANDARDS IN VIETNAM

On 18 August 2026, the Ministry of Finance issued Circular 118/2026/TT-BTC (“Circular 118”), guiding the eligible entities, scope and modalities for application of the International Financial Reporting Standards (IFRS) in Vietnam, effective from 01 January 2027. Specifically:

Eligible entities

  • Enterprises and economic organizations that are members of the international financial center in Vietnam.
  • Having the need, the capability and the resources to apply IFRS.
  • The application of IFRS under the Circular is optional and is not mandatory for all enterprises on a general basis.

Principles of application

  • IFRS must be applied in their original form, without any self-adjustment of the content of the standards, → so as to preserve the integrity and accuracy of the global accounting standards and to avoid distortions that would reduce the transparency of financial information.
  • IFRS must be applied consistently throughout the financial year; commencement or cessation of application may only take effect from the beginning of the following annual accounting period, → which prevents enterprises from changing accounting policies mid-period for the purpose of adjusting financial statement figures.
  • Financial statements must be complete, timely, truthful and transparent, and readily verifiable and controllable, → thereby enabling State management agencies, such as the executive and supervisory bodies of Vietnam, to readily perform their inspection and supervision functions.

Note: Enterprises and economic organizations must submit a written notification to the Ministry of Finance within 30 days prior to the date of commencing or ceasing the application of the International Accounting Standards.

Transitional provisions

  • Enterprises and economic organizations converting to the application of IFRS must comply with the conversion requirements and information presentation under IFRS 1.
  • For enterprises and economic organizations which have applied IFRS under Resolution 222/2025/QH15 on the international financial center in Vietnam and Decree 325/2025/NĐ-CP, where there is no change to the financial policies within the international financial center, they shall continue to comply with Circular 118/2026/TT-BTC.

⇒ Enterprises intending to apply IFRS should promptly assess the impact on their accounting policies, data systems, financial statements and human resources, particularly in respect of the data required for the preparation of the opening balance sheet upon conversion.