Circular 99/2025: The New Vietnam Accounting Regulations (Part 2)

Grants enterprises responsible autonomy (self-determination) to customize the CoA to meet internal management needs. The circular specifies only 71 mandatory Level 1 accounts. Entities must promulgate an Internal Accounting Policy justifying these changes.

Example: An enterprise can independently choose to detail the Cash Account (TK 111) using alphanumeric codes like ‘111.VND’ and ‘111.USD’, or numeric codes like ‘1111’ and ‘1112’

Purchase cost treatment: The initial cost constitutes only the Fair Value of the consideration paid. Related purchase costs (brokerage, transaction charges) must be immediately recognized as financial expenses in the current period.

Example: The asset’s initial cost is strictly the Fair Value of the consideration paid. Brokerage fees and transaction charges must be immediately recognized as Financial Expense (TK 635) in the current period.

Requires the establishment of an Impairment Provision (using TK 229) when objective or reasonable evidence indicates that the investment may not be fully recoverable. Entities must account completely for financial operating revenue generated from these investments, such as interest income from deposits or loans.

Example: If a corporate bond held to maturity shows objective signs that interest or principal recovery is doubtful, the entity must set up a specific provision using TK 229. Interest/dividend income is recorded in TK 515 upon confirmation of receipt.

Introduces the Standard Cost method as an additional permissible technique for valuing inventory. Materials or equipment reserved for a duration exceeding 12 months (or one normal operating cycle) must be presented as a long-term asset, rather than inventory, on the Statement of Financial Position. The new circular abolishes Account 611 (Purchases).

Example: Manufacturers can leverage Standard Costing for faster cost estimation and profit calculation during the period, adjusting variances to Cost of Goods Sold (COGS).

Introduces the option to apply the Fair Value Model for Property, Plant, and Equipment (PPE) and Investment Property (IP), achieving greater alignment with IFRS.

Example 1 (Going Concern): Large entities, particularly those preparing for IFRS adoption, can elect to revalue property assets to their Fair Value.

Example 2 (Non-Going Concern): If an enterprise is determined not to be a going concern, depreciation or impairment is deducted directly from the asset’s carrying value (net amount), thereby bypassing the use of the Accumulated Depreciation Account (TK 214).

Introduces a new Level 1 Account: TK 215 – Biological Assets. This step clearly separates biological assets from tangible PPE. Provides specific regulations regarding the establishment of impairment provisions for biological assets via TK 2295.

Example: Agricultural enterprises must now separate the cost and lifecycle of assets like perennial fruit trees or breeding cattle (TK 215) from standard factory equipment (TK 211)

IP held for operating leases continues to require depreciation, even during periods of rental suspension, with recognition in production or business expenses.

Example: IP held solely for capital appreciation is not depreciated but must undergo impairment testing for value decline, with losses booked to Cost of Goods Sold (TK 632). Gains or losses from the disposal of IP are presented on a net basis within the income statement.

Clarifies the economic treatment of non-legal entity BCCs.

Example: For BCCs where one party handles the main accounting/taxation, the transaction should be accounted for based on its true nature—either as a borrowing transaction (for the accounting party) or a lending transaction (for the other party).

Renamed “”Deferred Allocation Costs””. Functions to allocate costs gradually into production or business expenses over multiple periods. Goodwill generated during equitization must be recorded in TK 242 and allocated over a maximum duration of 3 years to General and Administrative Expense (TK 642).

Example: The account accumulates costs for periodic maintenance and repairs (TK 2413) which are then amortized systematically into operating expenses (e.g., TK 642).

Introduces a new Level 1 Account: 332 – Dividends and Profit Payable to standardize the formal recognition of this obligation.

Example: This standardizes the recording of the liability. Upon transition, the credit balance relating to dividends/profits previously within TK 338 must be formally transferred to TK 332.

Incorporates new tax provisions: Mandates detailed accounting for supplementary corporate income tax costs arising from Global Minimum Tax (GloBE) regulations, classifying them as long-term liabilities (Code 332). It also includes guidance for TK 1383 (Special Consumption Tax on imported goods).

Example: The system now includes specific guidance for the Global Minimum Tax (GloBE), adding TK 82112 for Supplementary Corporate Income Tax Expense.

Defines four specific conditions for classifying a liability as short-term, including instances where the debt is held primarily for trading purposes.

Example: A liability is classified as current if it is held primarily for trading purposes. Payables related to the working capital cycle remain current even if the settlement term exceeds 12 months.

Renames TK 4112 to “”Capital Surplus””. The conditions for classifying preferred shares as a liability are expanded. Classification applies if the shares meet any of the following:

(i) Mandatory repurchase;

(ii) Mandatory fixed dividends irrespective of profitability; OR

(iii) Conversion rights determined by the market price.

Standardises the process, achieving IFRS convergence.

The actual transaction rate may be defined as the average transfer buying/selling rate of the bank most frequently utilised.

Permits the application of an Approximation Rate (with a deviation tolerance of no more than +/-1%) for transactions occurring within the period.

The year-end revaluation rate must be the average transfer buying/selling rate.

Promotes revenue recognition based on the transfer of control and the fulfillment of Performance Obligations, achieving similarity with IFRS 15 five-step methodology (identify contract, identify performance obligations, determine transaction price, allocate price, recognize revenue). This shift significantly influences sectors characterized by complex contractual arrangements, such as Real Estate, Construction, and Services.

Example: For real estate development or long-term service agreements, enterprises must now identify distinct performance obligations and allocate and recognize revenue as control transfers, which may result in recognition over time rather than at a single point in time.