Vietnam IFRS Adoption 2027: Key Rules for Businesses

Vietnam’s IFRS Adoption Framework: What Eligible Businesses Need to Prepare for 2027

Introduction

Vietnam’s accounting framework is moving toward greater international alignment. From 1 January 2027, Circular No. 118/2026/TT-BTC will provide guidance on the application of international accounting standards by eligible enterprises and economic organisations operating within Vietnam’s International Financial Centre framework.

For businesses preparing financial statements for international stakeholders, this development creates an important opportunity to review accounting policies, reporting processes and internal controls.

However, the Circular does not require every company in Vietnam to adopt IFRS. Its scope is limited to eligible enterprises and economic organisations within the International Financial Centre framework that choose to apply the relevant international accounting standards and have the necessary needs, capabilities and resources.

Therefore, businesses should first determine whether the regulation applies to them before planning any accounting system changes.

What Is Vietnam’s IFRS Adoption Framework for 2027?

Circular No. 118/2026/TT-BTC was issued by Vietnam’s Ministry of Finance on 18 August 2026 and takes effect on 1 January 2027.

The Circular provides guidance on the subjects, scope and methods of applying international accounting standards when preparing and presenting financial statements and consolidated financial statements under the International Financial Centre framework.

In particular, the regulation establishes requirements for eligible organisations that choose to use international accounting standards. These include consistent application throughout the financial year, transparent financial reporting and appropriate explanations to relevant authorities.

Businesses should read the Circular together with the legal framework governing Vietnam’s International Financial Centre rather than treating it as a nationwide IFRS mandate.

Who Can Apply International Accounting Standards Under Circular 118/2026/TT-BTC?

Eligible enterprises and economic organisations

Under Article 2, the Circular applies to enterprises and economic organisations that are members of Vietnam’s International Financial Centre and fall within the relevant legal framework.

Eligible organisations may choose to apply international accounting standards if they have the need, capability and resources to do so.

Consequently, ordinary Vietnamese companies and foreign-invested enterprises should not assume that they automatically qualify simply because they have international shareholders or prepare group reporting packages.

Is IFRS mandatory for all Vietnamese businesses?

No. The Circular establishes an optional application framework for the eligible organisations it covers.

Companies outside this scope should continue to assess their reporting obligations under the accounting rules applicable to them. Businesses with overseas parent companies may still need to prepare additional reporting packages under group accounting policies, but that requirement is different from a statutory obligation to adopt IFRS in Vietnam.

Key Requirements Businesses Should Understand Before 2027

1. Apply international accounting standards consistently

Eligible organisations choosing this framework must apply the international accounting standards in force in their original form, without modification.

Furthermore, the chosen standards must be applied consistently throughout the financial year. Starting or discontinuing their application can take effect only from the beginning of the subsequent annual accounting period.

This means businesses should assess their accounting policies and reporting capabilities before selecting an implementation date.

2. Prepare financial statements with transparent disclosures

Financial statements and consolidated financial statements must provide complete, timely, faithful and transparent information that facilitates examination and control.

Accordingly, finance teams should review their accounting documentation, supporting evidence, reporting responsibilities and approval procedures.

Clear documentation can also help management explain accounting treatments and significant balances to relevant authorities.

3. Notify the Ministry of Finance before starting or stopping

Article 5 requires organisations choosing to apply international accounting standards to notify the Ministry of Finance in writing at least 30 days before commencing or ceasing their application.

In addition, organisations must take legal responsibility for their choice and provide sufficient information and clear explanations to tax, administrative and supervisory authorities.

They must also disclose their compliance with the applicable international accounting standards in the notes to their financial statements and consolidated financial statements.

4. Follow applicable submission and reporting deadlines

The Circular requires financial statements and consolidated financial statements to be submitted to the relevant executive, supervisory and competent Vietnamese authorities.

Importantly, reporting periods and submission deadlines continue to follow Vietnam’s applicable accounting legislation. Businesses should therefore confirm their specific reporting obligations rather than assume that using international accounting standards removes local filing requirements.

5. Consider first-time adoption requirements

Article 6 addresses the transition to international accounting standards and refers to IFRS 1, First-time Adoption of International Financial Reporting Standards, for comparative information and explanations in financial statements.

Eligible organisations planning a transition should assess the information required for comparative reporting and identify potential differences between their existing accounting policies and the standards they intend to apply.

Early planning can reduce the risk of missing historical data or inconsistent financial statement presentation.

Practical Preparation Checklist for 2027

Although the Circular does not apply to every company, eligible organisations can use the following checklist to prepare.

Step 1: Confirm eligibility

Review whether the organisation falls within the legal framework for members of Vietnam’s International Financial Centre. Do not rely solely on foreign ownership or international reporting needs to determine eligibility.

Step 2: Assess accounting policies

Compare existing accounting policies with the international accounting standards the organisation intends to apply. Identify differences in recognition, measurement, presentation and disclosure.

Step 3: Review historical financial data

Determine whether prior-period information and supporting records are sufficient for transition requirements and comparative financial reporting.

Step 4: Evaluate reporting systems and controls

Review the ability of finance systems to capture the required information. In addition, assess reconciliations, approval procedures, audit trails and the responsibilities of finance personnel.

Step 5: Establish an implementation plan

Assign responsibilities for technical accounting reviews, data preparation, financial statement preparation and management approval. Set internal milestones before the intended application date.

Step 6: Prepare notifications and disclosures

Confirm the written notification requirements, the minimum 30-day notice period and the disclosures required in financial statement notes.

Finally, establish a process for answering questions from tax, administrative and supervisory authorities.

How IFRS Adoption May Affect Financial Reporting

For eligible organisations, applying international accounting standards can require changes beyond the format of financial statements.

For example, differences between existing accounting policies and the selected international standards may affect reported assets, liabilities, revenue, expenses and equity. The actual impact will depend on the standards applicable to each organisation and its transactions.

Furthermore, consolidated reporting may require closer coordination between finance teams, subsidiaries and parent companies.

Businesses should therefore treat the transition as a financial reporting project involving accounting policies, systems, documentation and staff training rather than simply changing the presentation of existing reports.

How uSafe Can Support Your Accounting Preparation

Preparing for an accounting framework change requires reliable records, clear reporting processes and well-documented financial information.

uSafe provides accounting services, financial reporting support and audit support for businesses operating across markets including Vietnam, Singapore, Malaysia and Hong Kong.

Depending on the organisation’s needs, professional support may include reviewing accounting records, improving reconciliations, organising supporting documents and preparing financial reporting information for management review.

For eligible organisations considering international accounting standards, the first step is to confirm the applicable legal framework and assess the readiness of their existing accounting processes.

Explore uSafe’s services to learn more about accounting and audit support.

Frequently Asked Questions

1. When does Circular 118/2026/TT-BTC take effect?

The Circular takes effect on 1 January 2027 and applies to financial years beginning on or after that date.

2. Must every company in Vietnam adopt IFRS in 2027?

No. The Circular covers eligible enterprises and economic organisations within Vietnam’s International Financial Centre framework that choose to apply international accounting standards. It does not impose a universal IFRS adoption requirement on all Vietnamese companies.

3. Can a foreign-invested company automatically choose IFRS?

No. Foreign ownership alone does not establish eligibility under this Circular. The company must assess whether it falls within the specific legal scope of the regulation.

4. Must an eligible organisation notify the Ministry of Finance?

Yes. Under Article 5, an organisation choosing to apply international accounting standards must notify the Ministry of Finance in writing at least 30 days before commencing or ceasing their application.

5. Does adopting international accounting standards remove Vietnamese tax obligations?

No. Article 1 expressly states that the tax obligations of enterprises and economic organisations are determined under applicable tax legislation. Accounting standards and tax compliance should therefore be assessed separately.

6. What should an eligible business do before 2027?

It should confirm eligibility, review accounting policies, assess historical data and reporting systems, prepare transition documentation and establish an implementation plan. It should also confirm notification, disclosure and financial statement submission requirements.

Conclusion

Vietnam’s Circular 118/2026/TT-BTC provides a defined framework for eligible organisations within the International Financial Centre to choose international accounting standards from the 2027 financial year.

However, the framework is not a blanket IFRS mandate for every business in Vietnam. Eligibility, consistent application, transition documentation, financial statement disclosures and notification requirements are all important considerations.

By reviewing these matters early, eligible organisations can prepare their accounting processes and reporting systems more effectively.

Need support with accounting records or financial reporting preparation? Contact uSafe to discuss the accounting and audit support appropriate to your business.

Official References

Editorial note: The scope of Circular 118/2026/TT-BTC is specific to eligible members of Vietnam’s International Financial Centre framework. Verify the latest implementing guidance and the organisation’s eligibility before relying on the Circular for a compliance decision.