Accounting standardisation and IFRS reporting for a Japanese-owned components plant

Background

The client is a Japanese-owned electronic components manufacturer that has operated in Vietnam for more than ten years and employs around 1,800 people. Its books are kept under VAS, while the parent company requires an IFRS reporting package by the eighth working day of each month. The nine-person in-house finance team converted the figures manually across dozens of spreadsheets, so reports were often late and hard to reconcile from one period to the next.

Challenges

• The monthly close took an average of 18 working days, most of it spent reconciling intercompany balances.
• VAS–IFRS differences such as leases, inventory provisions and employee benefits were treated differently depending on who prepared them.
• The local chart of accounts did not match the parent's reporting lines, requiring more than 400 lines to be mapped by hand every period.

Our approach

• Weeks 1–3 — diagnosis: reviewed balances for the previous 24 months, interviewed finance and warehouse staff, and listed 37 material VAS–IFRS differences.
• Weeks 4–7 — design: built a two-way account mapping, a standard conversion bridge with built-in cross-checks, and accounting policies written in Vietnamese, English and Japanese.
• Weeks 8–11 — parallel run: the Corvane team and in-house accountants prepared two consecutive periods under both the old and new methods and explained every variance.
• Weeks 12–14 — handover: a day-by-day closing calendar, a 52-step control checklist and four training sessions for the chief accountant and staff.

Results

After three periods, the monthly close fell from 18 to 7 working days. Manually mapped lines in the reporting package dropped from more than 400 to fewer than 30. Unreconciled intercompany differences at period end decreased by about 85%. The parent company's external auditor noted that the IFRS bridge could be used directly as an audit working paper for the year-end audit.

“IFRS conversion is not hard because of the formulas; it is hard because everyone has to do it the same way every month. We spent most of our time on the process and the documentation.” — Ms Nguyen Hoai An, Partner, Accounting & Outsourcing, Corvane Advisory

Lessons learned

For FDI companies, the quality of parent reporting depends on standardisation from the source documents onward, not only at the final step. The account mapping should be treated as a shared asset with a named owner who updates it whenever a new type of transaction arises. Having Japanese-speaking consultants on the team significantly shortened the communication loop with the group's regional finance function.