Under IFRS, Financial instrument is regulated by four accounting standards. But for the FY 2012, only three standards have applied as following :
IAS 39: Recognition and Measurement (superseded by IFRS 9 effective 01 January 2015)
IAS 32: Presentation (disclosure provisions superseded by IFRS 7 effective 2007)
IFRS 7: Disclosure
Under VAS, there is only guideline about Disclosures of financial instruments that regulated by No. 210/2009/TT-BTC effective 2011. However, scope of this IFRS conversion has converted reports which are only related to converting BS and PL and does not involve disclosure.
Therefore, only IAS 39 is applicable in this engagement.
Note:
FA : Financial assets
FL : Financial liabilities
FVTPL: Fair value through profit and loss
# | Account balance | VAS | IFRS | Conclusion | ||
Classification | Accounting treatment | |||||
Initial recognition | Subsequent recognition | |||||
1 | Cash | Historical cost | Loan and receivable – amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | No difference |
2 | Short-term investment (There are all deposit accounts) | Historical cost | Loan and receivable – amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | No difference |
3 | Trade account receivable/Advance to supplier (All account receivable is short maturity and no state interest) | Historical cost | Loan and receivable – amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | The Gap: - Account receivable may be impaired - Amortised cost may differ historical cost Procedure: - Test impairment and evaluate the amount of account receivable using amortised cost (if any) |
4 | Other account receivable (Receivable from customers for provided goods and services ) | Historical cost | Loan and receivable – amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | The Gap and procedure as Account receivable above |
5 | Investment in associates/Joint-ventures | Historical cost | Out of scope of IAS 39 | Out of scope of IAS 39 | Out of scope of IAS 39 | Refer to other IAS (IAS 28, IAS 31) |
6 | Other long-term investment (Contribute capital to some companies and a project as a Joint Arrangement) | Historical cost | Out of scope of IAS 39 | Out of scope of IAS 39 | Out of scope of IAS 39 | |
7 | Loan (Long-term loan and Current proportion of long-term loan) -) | Historical cost | FL - Amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | The Gap: - Initial measurement may not be at FV - Effective interest rate differs interest rate on loan contract/convenants The procedure - Check the intial record of this loan - Subsequently measure this loan using EIR |
8 | Trade payable (All trade payable is short maturity and no state interest) | Historical cost | FL - Amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | All trade payable is short maturity and no state interest . Therefore, no difference in measure under IFRS or under VAS. |
9 | Accrued expenses | Historical cost | FL - Amortised cost | Fair value | Amortised cost using the effective interest method (EIR) | It is short-term accrual payable without interest implication. It should be measured at cost. Therefore, no difference in measure under IFRS or under VAS. |
10 | Provision cost | Historical cost | Out of scope of IAS 39 | Out of scope of IAS 39 | Out of scope of IAS 39 | |
11 | Owners' contributed capital | Historical cost | Equity instruments | IAS 39 does not address accounting for equity instruments issued by the reporting enterprise but it does deal with accounting for financial liabilities, classification of an instrument as liability or as equity is critical | There are no active market or observable to measure. These items should be measure at cost There is a fund that not probally settlement by cash need to adjust  | |
13 | Other funds | Historical cost | Equity instruments | |||
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