Status of applying fair value accounting in commercial bank in Vietnam

Abstract

 The characteristic of banking activities is the business in field of currency and banking services with the main subjects being financial instruments whose values often fluctuate according to market prices. Therefore, in order to ensure safety in operation as well as provide transparency, financial instruments need to be disclosed according to their real value. Fair value accounting will address this requirement. Fair value accounting at commercial banks in Vietnam has been initially implemented, however, in comparison with international accounting standards, there are still many limitations both in terms of legal basis as well as in practice. Through a survey of the financial statements of 35 Vietnam’s commercial banks in 2018, the paper aims to assess the current situation of applying the Fair Value Accounting in commercial banks of Vietnam, pointing out the limitations of this situation, which is an open basis for recommendations for applying Fair Value Accounting at Vietnam’s commercial banks according to international standards.