According to Decision No. 345/QĐ-BTC approving the IFRS adoption roadmap in Vietnam, starting from 2025, IFRS will be applied at the consolidated financial statement level for specific enterprises, such as parent companies of state-owned economic groups, listed parent companies, large public parent companies that are not yet listed, and other large-scale parent companies.

This transition is not easy and requires businesses to overcome numerous challenges.

So, what difficulties lie ahead in this transition process?

1️⃣ Asset impairment when applying IFRS for the first time

If the carrying amount of an asset exceeds its recoverable amount, the enterprise must recognize an impairment loss in the comprehensive income statement for the period. This can negatively impact the initial IFRS financial statements of businesses that are operating at a loss or have subsidiaries or divisions with financial difficulties, indicating that their assets may be impaired.

2️⃣ Leased assets: Significant differences between VAS 06 and IFRS 16

The accounting treatment of leased assets differs significantly between VAS 06 and IFRS 16. As a result, a company that reports a profit under VAS may record a loss when preparing consolidated financial statements under IFRS.

3️⃣ More complex financial reporting processes

The transition to IFRS requires businesses to adjust numerous accounting methods and principles. This can be challenging for accounting teams unfamiliar with international standards, leading to additional costs for training and the implementation of new systems.

4️⃣ Lack of necessary resources and expertise

The IFRS transition demands the involvement of experts with in-depth knowledge of IFRS. For many businesses that have never applied IFRS before, acquiring these resources is a major challenge, putting pressure on financial and human resources and potentially disrupting daily operations.

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