VAS 07 - OVERVIEW

Introduction

VAS 07 - Kế toán các khoản đầu tư vào công ty liên kết (Accounting for Investments in Associates) is a Vietnamese Accounting Standard (VAS) that prescribes the accounting for investments in associates. It defines associates and specifies the equity method as the primary method for accounting for these investments.

Purpose

The primary purposes of VAS 07 are:

Define Associates: To establish the criteria for identifying an entity as an associate.
Prescribe the Equity Method: To specify the equity method as the standard accounting treatment for investments in associates.
Outline Impairment Testing: To provide guidance on assessing and recognizing impairment losses on investments in associates.
Define Disclosure Requirements: To specify the information that should be disclosed in the financial statements about investments in associates.

Implications

The implications of VAS 07 are:

Accurate Reflection of Influence: It ensures that investors appropriately reflect their influence over associates in their financial statements.
Consistent Application of the Equity Method: It promotes consistent application of the equity method, leading to comparable financial reporting.
Transparent Reporting: It enhances the transparency of financial reporting by requiring specific disclosures about investments in associates.
Informed Decision-Making: It provides users of financial statements with the information they need to make informed decisions about a company's investments in associates.

List of Knowledge Points

This learning roadmap will cover the following key knowledge points from VAS 07: