An irreversible trend

Speaking at a recent virtual forum on IFRS hosted by the Journal of Economics and Finance under the Ministry of Finance, Trinh Duc Vinh, Deputy Director General of the Department of Accounting and Auditing Supervision and Chair of the National Chief Accountants Club, highlighted that Vietnam’s GDP in 2024 is estimated at around USD 470 billion, while import-export turnover reached USD 786 billion, equivalent to 165% of GDP. This figure reflects the deep integration of Vietnam’s economy into the global trade network.

According to him, participation in the IFRS “game” is no longer a matter of aspiration, but an inevitable necessity. “The adoption of IFRS is now an irreversible global trend”, he stressed, noting that IFRS should not be viewed as a barrier but rather as an opportunity for businesses to enhance transparency, standardize financial information, improve access to capital, and solidify their international standing. 

Notably, IFRS adoption not only improves the quality of financial reporting but also plays a key role in upgrading Vietnam’s stock market status and affirming its position as a fully-fledged market economy. Globally, more than 160 countries and territories have adopted IFRS, underlining its status as a necessary trend for countries aiming to integrate effectively into global value chains.

From a professional perspective, Tran Hong Kien, Deputy General Director of PwC Vietnam, remarked that IFRS is a principle-based system requiring businesses to reflect the economic substance of transactions. 

To achieve this, management must establish internal controls and transparent financial processes from the outset. He emphasized that successful IFRS implementation begins not with the accounting department but with genuine commitment from top leadership.

As a provider of accounting and auditing training services, Nguyen Thi Thuy, Training Director at Auditcare & Partners Vietnam (ACV), affirmed that IFRS plays a vital role in business operations in the context of international economic integration and the growing demand for foreign capital. 

However, she pointed out that the main challenge for enterprises is not cost or technology, but rather leadership mindset and the development of appropriate mechanisms and policies by the government.

A strategic time for IFRS adoption

Acknowledging that IFRS adoption is both inevitable and beneficial for businesses and the economy, Vu Thi Anh Hong, Deputy Editor-in-Chief of the Journal of Economics and Finance, stated that to facilitate IFRS implementation, the Ministry of Finance issued Decision No. 345/2020/QĐ-BTC in 2020 to approve a roadmap for IFRS application in Vietnam.

By 2024, the revised Law No. 56/2024/QH15, passed on November 29, 2024, amended nine laws including the Accounting Law, mandating the Ministry of Finance to guide Vietnam’s accounting standards in alignment with international standards, including the scope, timeline, and relevant aspects of IFRS application.

This gradual roadmap aims to help enterprises build capacity and prepare for IFRS adoption in accordance with international practices in finance and accounting. It also sets the stage for enhanced transparency and effectiveness in financial management, contributing to Vietnam’s sustainable development and integration.

However, IFRS implementation in Vietnam still faces considerable obstacles, including workforce capacity, data systems, and financial management mindsets aligned with international standards.

To address these issues, Trinh Duc Vinh noted that the Ministry of Finance is drafting a Circular to establish a legal framework for IFRS application in Vietnam. This Circular is designed to create the most favorable conditions for businesses to adopt IFRS, while also allowing for voluntary and self-determined participation.

In addition, the Ministry of Finance will continue partnering with professional associations and international organizations such as the Association of Chartered Certified Accountants (ACCA) and the Institute of Chartered Accountants in England and Wales (ICAEW) to offer free training programs. These efforts aim to build capacity among accountants, auditors, and corporate leaders.

While government support is essential, Nguyen Thi Thuy emphasized that successful IFRS adoption depends heavily on leadership. Business leaders must fully recognize the role of IFRS in advancing their company’s development. Without viewing IFRS as a strategy to enhance competitiveness, there will be no meaningful action.She added: “This is an ideal time for businesses to transition to IFRS, as the Ministry of Finance and professional associations have created a comprehensive legal and training support system”.

IFRS adoption is more than just a technical accounting shift. It represents a comprehensive transformation in financial management thinking. This requires businesses to standardize data systems, upgrade technology, restructure processes. Most importantly, businesses must develop a workforce with both technical competence and a solid understanding of international standards.