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IFRS / Accounting Standards

Clarification of "Accounting Unit" Definition for Non-Budget Organizations and Service Units under the 2015 Accounting Law

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Based on:Luật Kế toán (khoản 4 Điều 3, Điều 2); Nghị định số 174/2016/NĐ-CP; Thông tư số 90/2021/TT-BTC; Thông tư số 41/2022/TT-BTC - Ministry of Finance

This explanation was generated by AI and checked by an automated AI review, not by a human expert. It is not legal, tax or accounting advice and may contain errors. Check the official document before you rely on it.

The Ministry of Finance (Department of Accounting and Auditing Supervision) clarifies that the phrase "organizations and service units not using the state budget" in Article 2.3 of the 2015 Accounting Law refers broadly to any organization that does not fall into the other four categories: state budget agencies, state agencies and budget-funded service units, enterprises, and cooperatives. This is the first interpretation - "organization" stands independently from "service unit." Examples include extra-budgetary state financial funds, social funds, and charitable funds. All such entities are required to organize an accounting apparatus and prepare financial statements. In addition to accounting law, the specific accounting obligations of each organization type depend on its governance structure, operational model, and financial mechanism as defined in relevant specialized regulations.

Q&A: Definition of Accounting Unit

Question (Code 200426-38): Under the 2015 Accounting Law, "accounting units" include "organizations and service units not using the state budget." Clarification needed: is "organization" an independent, broad category or must it be read together with "service unit"?

Answer (Department of Accounting and Auditing Supervision):

Article 3.4, Accounting Law: "An accounting unit is an agency, organization, or unit specified in Articles 2.1 through 2.5 of this Law that prepares financial statements."

Article 2 lists five categories:

  1. Agencies responsible for state budget revenue and expenditure;
  2. State agencies, organizations, and service units using the state budget;
  3. Organizations and service units not using the state budget;
  4. Enterprises and foreign enterprise branches/representative offices in Vietnam;
  5. Cooperatives and cooperative unions.

Official Interpretation

"Organizations and service units not using the state budget" means entities that do not belong to categories 1, 2, 4, or 5. Examples include:

  • Extra-budgetary state financial funds (Decree 174/2016/ND-CP; Circular 90/2021/TT-BTC)
  • Social funds and charitable funds (Circular 41/2022/TT-BTC)

Additional Note

Determining the specific accounting obligations of an entity (organizing accounting apparatus, preparing financial reports) requires reference not only to accounting law but also to the entity's governance, operational model, and financial mechanism under applicable specialized regulations.

Luật Kế toán (khoản 4 Điều 3, Điều 2); Nghị định số 174/2016/NĐ-CP; Thông tư số 90/2021/TT-BTC; Thông tư số 41/2022/TT-BTC

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