S & S NEWS LETTER FOR 2010 OCTOBER Part 2
VAS IN COMPARISON With IAS/IFRS
NON-ISSUED VIETNAMESE ACCOUNTING STANDARDS 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
NON-ISSUED VIETNAMESE ACCOUNTING STANDARDS 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" ._ VAS "Agriculture"
OVERVIEW OF DIFFERENCES BETWEEN VAS AND IAS-IFRS Overview of differences between VAS and IAS-IFRS 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.
INSIGNIFICANT DIFFERENT VAS IN COMPARISON WITH IAS/IFRS 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"
VAS 01: GENERAL STANDARD - FRAMEWORK Main differences 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
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
PROPERTY, PLANT AND EQUIPMENT (VAS 03 - IAS 16) Main differences 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
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
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
LEASES (VAS 06 - IAS 17) Main differences 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
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
INTERESTS IN JOINT VENTURES (VAS 08 - IAS 31) 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
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 fictionalcurrency (recognition of exchange difference) Tax effects of all exchange differences
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
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...
CONSTRUCTION CONTRACT (VAS 15 - IAS 11) Main differences Recognition of contract revenue and expenses Stage of completion method Progress payments method Amount of work completed method Recognition of expected losses
BORROWING COSTS (VAS 16 - IAS 23) Main differences 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
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
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
STATEMENT OF CASH FLOWS (VAS 24 - IAS 07) Main differences Investing activities Cash flows from derivatives Taxes on income Investments in subsidiaries, associates and joint ventures
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