Vietnam modifies accounting rules for financial reporting

Vietnam, like a number of developing countries, has been struggling with a significant decline in Foreign Direct Investment (FDI) due to the global economic slowdown.  According to the source Vietnam Briefing, the country in 2009 experienced a 70% decline in FDI relative to 2008.  It should be noted that 2008 represented a banner year in Vietnam for FDI as it reached $64 billion USD, up from around $20 billion USD in 2007.  All of these numbers represent pledged FDI and not actual capital disbursements.

As a way of strengthening its accounting system and to make the country more friendly to FDI, the Vietnamese Ministry of Finance is allowing foreign companies to choose the currency they use to transact business.  Previously they had to report in the Vietnamese dong and file with the government for permission to use a different currency.  These companies now have more flexibility in the base currency for reporting but the chosen currency must be one predominately used for banking transactions and for price quotations.

Read the full article on Vietnam's accounting rule change for financial reporting.