IFRS: Key to Enhancing Financial Transparency and Expanding International Capital Access for Vietnamese Enterprises

Keywords: IFRS, financial transparency, listed companies, FDI, international accounting standards, capital markets, report conversion

Introduction

As financial integration deepens, adopting International Financial Reporting Standards (IFRS) is becoming an objective requirement for many Vietnamese enterprises, especially large listed companies, foreign-invested firms, and commercial banks. At the seminar "Strengthening Financial Transparency through IFRS" jointly organized by Smart Train Academy, the Vietnam Exchange, the State Securities Commission, and the Hanoi Stock Exchange, participants shared many practical perspectives showing that IFRS is no longer a theoretical concept but an urgent market need.

Necessity of IFRS Adoption: From External Pressure to Internal Demand

Ms. Nguyen Thi Thu Ha, representative of the Department of Accounting, Auditing and Financial Supervision under the Ministry of Finance, stated that the Ministry, in collaboration with an independent consultant, surveyed 46 institutions, including 27 or more large listed companies, to assess IFRS adoption needs and readiness. The results showed that most of these companies face increasing pressure from foreign investors and international financial institutions to prepare reports according to international standards.

Notably, 21 FDI enterprises are under direct pressure from overseas parent companies that have already adopted or are implementing IFRS. However, since Vietnam has not yet officially allowed widespread IFRS adoption, these enterprises are forced to prepare a separate set of conversion reports, increasing costs, extending processing time, and putting heavy pressure on accounting and internal audit teams.

This reality reflects a paradox: market demand is already clear, but the legal framework and guidance system have not kept up with changes. It is this gap that forces many companies to proceed with the transition on their own, usually with support from large audit firms.

IFRS as a "Passport" to Global Capital Markets

In the modern financial system, financial reports are not just tools to reflect operating results but also a common language between enterprises and investors. When Vietnamese companies use IFRS, financial information improves in transparency, comparability, and credibility, making it more trustworthy in the eyes of international partners. This is why IFRS is likened to a "passport" helping enterprises enter global capital markets.

Today, many reports prepared under Vietnamese Accounting Standards (VAS) still need to be converted to IFRS to meet requirements from shareholders, credit institutions, or foreign investment funds. But this process is not simple. Without detailed regulatory guidance, companies face a series of challenges: determining the conversion scope, assessing standard differences, handling data systems, redesigning internal control processes, and training staff.

This is also one reason why IFRS adoption in Vietnam is seen as an "objective reality"—it is no longer limited to FDI enterprises but extends to large listed companies, enterprises seeking international capital, and financial institutions wanting to enhance market reputation.

Commercial Banks and Large Enterprises: Key Drivers of Transition

A noteworthy phenomenon is that several large commercial banks, including Vietcombank, Techcombank, and VPBank, have proactively prepared financial reports under IFRS to attract strategic investors. This is a positive signal, as the banking sector often plays a leading role in accounting innovation and risk management.

However, implementation in the banking sector cannot happen in isolation. The State Bank needs to review and amend some regulations that differ from IFRS, such as provisioning policies, and also develop a clear implementation roadmap to ensure consistency and comparability among credit institutions.

Additionally, many banks have not started the transition due to limited knowledge and resources. For these institutions, the biggest obstacles are not just accounting techniques but also IT costs, staff training, and changes in management thinking. Many shareholders and management will only consider adoption when the government makes it mandatory, indicating that a much wider need for IFRS education remains.

Among enterprises, large FDI firms like Samsung, LG, Panasonic, Canon, and IBM, as well as some local companies like Vinamilk and Medlatec, have also expressed strong willingness to adopt IFRS. This shows that IFRS is no longer a distant future trend but has already entered the management practices of leading enterprises.

Transition Approach: Practical Training and Phased Roadmap

Ms. Pham My Linh, representative of KPMG Vietnam, emphasized that IFRS training cannot remain theoretical but must be combined with real business transactions. This approach helps management better understand the substance of each accounting assumption, enabling more accurate decisions during implementation.

She believes that enterprises should adopt a prudent transition approach, starting from subsidiaries before gradually expanding to the group level. Small-scale piloting helps assess impacts over a full cycle, identify new issues, and adjust systems before scaling up.

Suggested transition roadmap consists of three phases and four main steps: preparation phase, for defining scope and forming a project team; requirements analysis phase, for identifying quantitative and qualitative gaps between VAS and IFRS; design and construction phase, for adjusting IT systems, processes, and documentation; and finally, implementation phase, including preparing opening balances and comprehensive training for relevant staff.

This approach shows that IFRS is not just an accounting department task but a comprehensive transformation project for the entire enterprise, requiring participation from senior management, technology, internal audit, and risk management.

Conclusion

IFRS is gradually becoming essential for Vietnamese enterprises seeking to improve transparency, enhance access to international capital, and strengthen competitiveness in global markets. Although challenges related to legal framework, costs, and human resources remain, the transition trend is irreversible. Companies that act early will gain significant advantages in attracting investors, enhancing market confidence, and improving governance levels aligned with international practices.

Organizing more in-depth seminars and expanding dialogue between regulators, enterprises, banks, and audit firms will be key to advancing this process more effectively. In the long term, IFRS is not just an accounting tool but also the foundation for building a transparent, modern, and internationally integrated Vietnamese financial market.