Decision No. 1299/QD-BTC dated July 31, 2019 approving the scheme for announcement of Vietnam's public sector accounting standards

DECISION

APPROVING THE SCHEME FOR ANNOUNCEMENT OF VIETNAM'S PUBLIC SECTOR ACCOUNTING STANDARDS

MINISTER OF FINANCE

Pursuant to the Law on accounting No. 88/2015/QH13 dated November 20, 2015;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Finance;

At the request of the Director of the Department of Accounting and Auditing Regulations,

HEREBY DECIDES:

Article 1. The Scheme for announcement of Vietnam’s public sector accounting standards that includes the following contents is hereby approved.

I. OBJECTIVES

1. General objectives

Improve the legal framework in terms of finance and accounting; establish effective and efficient management tools for the State and public sector entities; increase the accountability of public sector entities which should be made in a timely and sufficient manner and internationally recognized. Determine grounds for preparing state financial statements and performing general state accounting task by the State Treasury.

Promote economic integration, especially regional and international integration in public sector, so as to improve the transparency and comparableness of financial data.

2. Specific objectives

- Study, formulate, promulgate and announce Vietnam’s public sector accounting standards on the basis of International public sector accounting standards. Vietnam's public sector accounting standards applied by public sector entities must meet the national requirements for economic integration, be consistent with Vietnam’s reforms in and policies for economic management and public sector financial management, and be used as the basis for providing financial information in a timely and honest manner so as to improve competence, efficiency and transparency in the management of Government resources.

- Studying, formulation and announcement of Vietnam's public sector accounting standards are associated with the development of the Scheme for building model for preparation of state financial statements and shall be used as the basis or grounds for state financial policies as well as relevant laws such as the Law on state budget, the Law on management and use of public property, the Law on public debt management, the Law on management and use of state funding invested in enterprises, and the Law on securities reformed or being reformed in conformity with international practices and standards.

- Promulgated Vietnam’s public sector accounting standards shall be used as the basis for promulgating specific guidelines on accounting for each type of public sector entities in conformity with their organization and operation as well as regulations on public finance and state budget.

II. CONTENTS AND SOLUTIONS

1. Regulated entities

With regard to accounting units, this Scheme shall apply to all public sector entities, except state-owned enterprises performing business operations, commercial public service providers, other organizations or entities that do not use funding derived from state budget and of which asset and public debt liabilities incurred when it is liquidated, dissolved or declared bankrupt do not involve the State.

With regard to training institutions and professional associations, this Scheme shall apply to universities, institutions, academies and professional associations with regard to cooperation in study, training and assistance in applying Vietnam's public sector accounting standards.

With regard to state regulatory authorities, this Scheme shall apply to the Ministry of Finance and authorities related to the process of study, formulation, promulgation, training and provision of guidelines for development of Vietnam’s public sector accounting standards.

2. Roadmap for application

In the period from 2019 to 2024, the Ministry of Finance shall make necessary preparations for implementing the Scheme so as to ensure that Vietnam’s public sector accounting standards shall be promulgated on schedule in each period.

a) The first period (2019):

Formulate and promulgate the Scheme for announcement of Vietnam's public sector accounting standards. Duration of implementation: By September, 2019

Establish the drafting board/editorial group in charge of drafting Vietnam’s public sector accounting standards. Duration of implementation: By December, 2019

b) The second period (2020-2024): Study, formulate, promulgate and announce Vietnam’s public sector accounting standards according to the following roadmap:

Stage 1: Duration of implementation is from January, 2020 to December, 2020

Stage 2: Duration of implementation is from January, 2021 to December, 2021

Stage 3: Duration of implementation is from January, 2022 to December, 2022

Stage 4: Duration of implementation is from January, 2023 to December, 2023

Remaining stages: Duration of implementation is from January, 2024

After 21 accounting standards (Stage 4) are promulgated, the Ministry of Finance shall review, evaluate and select remaining standards to be promulgated in the following periods in conformity with policies for public sector which are amended in conformity with principles set forth in accounting standards. In case policies for finance or state budget cannot be amended, contents which are not conformable with international public sector accounting standards must be determined. Other standards significantly different from international public sector accounting standards shall be promulgated in remaining stages and applied when such differences are settled in conformity with Vietnam's economy.

3. Solutions for implementing the Scheme

a) Establish the drafting board and editorial group in charge of drafting Vietnam’s public sector accounting standards (in 2019)

The drafting board for Vietnam’s public sector accounting standards is comprised of representatives of ministries, local governments, professional associations, training institutions and entities affiliated and not affiliated to the Ministry of Finance. The Deputy Minister of Finance and the Director of the Department of Accounting and Auditing Regulations shall act as the head and the standing deputy head of the drafting board for Vietnam’s public sector accounting standards respectively. The number of members of the drafting board shall be subject to the Ministry of Finance’s decision.

The head and deputy head of the editorial group for accounting standards shall be the Director and Deputy Director of the Department of Accounting and Auditing Regulations respectively; its members include officials of the Department of Accounting and Auditing Regulations and representatives of ministries, universities, professional associations, training institutions and public service providers. The number of members of the editorial group shall be decided by its head.

b) Formulate and announce accounting standards

- Translate international public sector accounting standards into Vietnamese;

- Study and formulate standards;

- Promulgate and announce standards. Form of announcement:

+ Minister of Finance promulgates Circulars to promulgate and announce Vietnam’s public sector accounting standards according to stages specified in the Scheme.

+ Minister of Finance promulgates Circulars to provide guidelines on accounting in each sector according to public sector accounting standards and current policies for finance and state budget.

c) Formulate and complete legislative documents in financial and accounting sectors.

d) Apply Vietnam’s public sector accounting standards

III. IMPLEMENTATION

1. Responsibility of relevant units

a) Ministry of Finance shall:

- Consider giving approval for the Scheme for announcement of Vietnam's public sector accounting standards;

- Establish the drafting board and editorial group in charge of drafting Vietnam's public sector accounting standards, mobilize resources and stipulate mechanisms for and organize operation of the drafting board and editorial group so as to ensure the study and announcement of accounting standards according to the roadmap specified in Section 2.3 of the Scheme;

- Promulgate Circulars of the Minister of Finance on promulgation and announcement of Vietnam’s public sector accounting standards (according to stages specified in the Scheme) and Circulars providing guidelines for accounting applicable to each sector in conformity with public sector accounting standards promulgated according to the roadmap, ensuring the consistency between policies for finance, state budget and accounting standards;

- Make plans and organize activities related to the announcement of Vietnam’s public sector accounting standards;

- Take charge of reviewing and evaluating the actual capacity of regulated entities of this Scheme in each stage so as to provide specific guidelines for implementation of the Scheme, thereby ensuring the feasibility of the Scheme;

- Make cost estimates and allocate funding for covering costs of study and implementation of the Scheme.

b) Ministries and Provincial People’s Committees shall:

- Cooperate with the Ministry of Finance in studying and announcing Vietnam’s public sector accounting standards;

- Proactively organize the implementation of this Scheme according to their managed sectors, propose solutions for improving legal framework for ensuring the feasibility of the Scheme and organize activities related to the application of the announced Vietnam's public sector accounting standards.

c) State regulatory authorities and public service providers:

State regulatory authorities and public service providers that are regulated entities of this Scheme shall make plans for implementing the Scheme according to specified guidelines provided by the Ministry of Finance.

 d) Training institutions:

Training institutions that provide training programs in accounting shall prepare appropriate syllabi and teaching methods for providing training programs in Vietnam’s public sector accounting standards.

dd) Professional associations shall:

Cooperate with the Ministry of Finance in studying, training, disseminating information and assisting their affiliates and members in the course of announcement, promulgation and application of Vietnam’s public sector accounting standards.

2. Funding for implementing the Scheme

a) Funding derived from state budget for recurrent expenditures

The Ministry of Finance shall allocate funding derived from budget for recurrent expenditures for covering operations of the drafting board and editorial group in charge of drafting Vietnam's public sector accounting standards and other recurrent expenditures as regulated by laws.

b) Funding from sponsors

Funding provided by domestic and foreign sponsors shall be used to cover relevant activities as agreed upon with such sponsors.

Article 2. This Decision comes into force from the date on which it is signed.

Article 3. Director of Department of Accounting and Auditing Regulations, Director of Department of Personnel and Organization, Director of Legal Department, and Chief of the Ministry Office are responsible for the implementation of this Decision./.