A group with subsidiaries in Vietnam must not only prepare separate financial statements for each legal entity, but in many cases also consolidated financial statements for the whole group. From the 2026 financial year, the legal framework for preparing and presenting these statements has changed significantly. This article sets out 5 key notes under the texts in force as of 14/10/2026.
1. Correctly identify the “parent company” and the consolidation scope — control is the decisive criterion
Under VAS 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” and VAS 11 “Business Combinations”, control means the power to govern the financial and operating policies of an enterprise so as to obtain economic benefits — evidenced by the parent holding more than 50% of charter capital or ordinary shares, the right to appoint the majority of the Members’ Council/Board of Directors, or the right to decide charter amendments. The key point: control — not merely the ownership percentage — is the decisive criterion for the consolidation scope. A Vietnamese subsidiary of a foreign group still falls within the upper-level parent’s consolidation scope. Conversely, cases of temporary control or long-term severe restrictions on operations are excluded from the scope under VAS 25. Misidentifying the scope at the outset distorts the entire statements.
2. Check the exemption from preparing consolidated statements — the often-missed point for intermediate parents
Circular 202/2014/TT-BTC guiding the preparation and presentation of consolidated financial statements remains in force, but has been amended and supplemented by Circular 43/2026/TT-BTC (effective 20/4/2026; applicable to the preparation and presentation of consolidated statements for financial years beginning on or after 01/01/2026). All practice at this point must be based on the post-Circular 43/2026 version — citing the original Circular 202/2014 without noting the amendments is no longer correct (forms and some timelines have changed).
The key change in amended Article 5: at the end of the accounting period, the parent company is responsible for preparing the group’s consolidated financial statements, where (a) a parent that is a listed organisation, a large public company, or a state-owned parent prepares annual and semi-annual full-form and quarterly summary-form consolidated statements (full-form quarterly statements permitted if desired); (b) other parents prepare annual full-form consolidated statements.
Exemption cases (Article 5(2)): a parent is exempt when it simultaneously satisfies 6 conditions: (i) it is not a public-interest entity; (ii) it is not state-owned and the state holds no controlling stake; (iii) it is simultaneously a subsidiary of another enterprise and has shareholder consent (including non-voting shareholders); (iv) its capital and debt instruments are not traded on any market (including OTC, domestic or foreign); (v) it is not in the process of filing to issue financial instruments to the public; (vi) the company owning that parent has prepared consolidated financial statements for public disclosure purposes in accordance with Vietnamese Accounting Standards. The often-missed practical angle: a Vietnamese subsidiary that is simultaneously an intermediate parent may be exempt, but the upper-level parent’s consolidated statements must be prepared under VAS — not pure IFRS — while many parent groups apply IFRS. Failing condition (vi) means no exemption.
3. Align accounting periods and accounting policies before consolidation
The general preparation and presentation principles (Article 10 of Circular 202/2014, unchanged by Circular 43/2026): parent and subsidiaries must have the same accounting period; the subsidiary’s accounting policies for similar transactions and events must be adjusted to align with the parent’s policies before consolidation. In practice this is the trickiest point for groups with Vietnamese subsidiaries: the foreign parent and the Vietnamese subsidiary often have different financial years (e.g., the parent’s year ends 31 March while the Vietnamese subsidiary uses the calendar year), requiring period-adjustment statements and policy conversions — time-consuming work that must be planned from the start of the financial year, not crammed in near the filing deadline.
4. Fully eliminate intra-group transactions and investments — the most common error
The core technical principles (Articles 8–16 of Circular 202/2014, unchanged) require: eliminating the carrying amount of the parent’s investment in each subsidiary, recognising any resulting goodwill or bargain purchase gain; and eliminating all intra-group transactions — intra-group sales, intra-group balances, intra-group dividends, and unrealised gains/losses from intra-group transactions. This is the most common error in preparing consolidated statements: merely adding up the companies’ figures without eliminating intra-group transactions inflates the group’s revenue, balances and profits. The summary of adjusting entries and consolidation items must be fully prepared as the basis (per the sequence in Articles 11–12).
5. Use the new forms, meet the 90-day deadline, and complete the mandatory audit
New forms (Appendix I of Circular 43/2026, applicable from 20/4/2026): Form B 01 – DN/HN (consolidated statement of financial position), B 02 – DN/HN (annual consolidated income statement), B 03 – DN/HN (annual consolidated cash flow statement — direct and indirect methods), B 09 – DN (notes to annual consolidated financial statements), BTH01 – HN and BTH02 – HN (summary of adjusting entries and consolidation items). Newly added items include “Goodwill”, “Non-controlling interests”, “Share of profit or loss of joint ventures and associates”, “Parent company’s profit after tax” and “Non-controlling shareholders’ profit after tax”. Statements for the 2026 financial year must use the new forms, not the old Circular 202/2014 originals.
Deadline (Article 6, as amended by Circular 43/2026): annual consolidated financial statements must be submitted to owners and competent state management authorities no later than 90 days from the end of the annual accounting period; they must also be publicly disclosed under the Law on Accounting and its amending/replacing texts. Note: if securities, credit or insurance legislation provides different disclosure forms or timelines, the specialised legislation applies — entities in these sectors may not rely solely on the general 90-day timeline.
Mandatory audit and sanctions: consolidated financial statements are subject to mandatory independent audit under the Law on Independent Audit 67/2011/QH12. Current sanctions: Article 27(3) of Decree 228/2025/ND-CP (effective 18/8/2025) imposes a fine of VND 40–50 million for failing to audit financial statements where audit is mandatory (Chapter III of Decree 41/2018/ND-CP has been repealed and no longer applies).
Related corporate income tax: the current framework is the Law on Corporate Income Tax 67/2025/QH15 (effective 01/10/2025) with progressive rates by prior-year revenue: 15% (revenue up to VND 3 billion), 17% (over VND 3 billion up to VND 50 billion), 20% (standard) — no longer the flat 20% of Law 14/2008/QH12. Goodwill arising from business combinations is amortised under VAS 11 and Circular 202/2014.
Frequently asked questions
Must a Vietnamese subsidiary of a foreign group prepare consolidated financial statements?
The subsidiary prepares its own separate statements as required. The consolidation duty sits with the parent; an intermediate parent in Vietnam may be exempt if it simultaneously meets the 6 conditions in Article 5(2) (post-Circular 43/2026) — including that the upper-level parent’s consolidated statements follow Vietnamese Accounting Standards.
Why do many IFRS-applying groups fail the exemption?
Because condition (vi) requires the upper-level parent’s consolidated statements to be “in accordance with Vietnamese Accounting Standards”. If the parent group only prepares pure-IFRS statements without a VAS version, the intermediate parent in Vietnam does not qualify for exemption.
What if parent and subsidiary have different financial years?
Accounting periods must be aligned and the subsidiary’s accounting policies adjusted to the parent’s before consolidation (Article 10 principle, Circular 202/2014). Plan from the start of the financial year.
How is goodwill arising on consolidation treated?
When eliminating the parent’s investment in the subsidiary, the difference is recognised as goodwill (or a bargain purchase gain), and goodwill is amortised under VAS 11 and Circular 202/2014.
What is the fine for not auditing consolidated financial statements?
VND 40–50 million under Article 27(3) of Decree 228/2025/ND-CP (effective 18/8/2025).
Which forms apply for the 2026 financial year?
The new forms in Appendix I of Circular 43/2026 (B 01 – DN/HN, B 02 – DN/HN, B 03 – DN/HN, B 09 – DN, BTH01 – HN, BTH02 – HN), applicable to financial years beginning on or after 01/01/2026.
Sources
- VAS 25 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” and VAS 11 “Business Combinations” — applicable standards (control as the decisive consolidation-scope criterion);
- Circular 202/2014/TT-BTC — effective 05/02/2015, guiding consolidated financial statement preparation and presentation (to be read with Circular 43/2026);
- Circular 43/2026/TT-BTC — effective 20/4/2026, applicable to financial years beginning on or after 01/01/2026: amending Articles 5 (preparation duty; 6 exemption conditions), 6 (90-day deadline), 7, 10, 13 and new forms in Appendix I;
- Law on Accounting 88/2015/QH13 (amended by Law 56/2024/QH15) — the parent law of the financial reporting regime;
- Law on Independent Audit 67/2011/QH12 — mandatory audit of consolidated financial statements;
- Decree 228/2025/ND-CP — effective 18/8/2025: Article 27(3) (VND 40–50 million fine for failure to conduct mandatory audits);
- Law on Corporate Income Tax 67/2025/QH15 — effective 01/10/2025: progressive 15%/17%/20% rates by revenue.
For reference only; not legal advice. This article was drafted by AI and quality-checked by the AI Legal Council of FLAT Law Firm; it has not been reviewed or approved by a human lawyer. Regulations may change; please check the current legal texts before applying.
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