Question

what is the accounting standards differences between Lao and Myanmar?

Answer 1

A comparison of IFRS and Laos GAAP
Key Differences between Laos Accounting Standards (LAS) and International Financial
Reporting Standards (IFRS)
There are no comprehensive set of accounting standards in Laos. LAS is currently under
development by the Laos Institution of Certified Public Accountant (LICPA). At present,
companies apply Laos Accounting Manual (LAM) issued by the Ministry of Finance. LAM is a set
of instructions based on accrual basis of accounting which is designed for local tax submission
purposes. Accordingly, there are significant differences between LAM and IFRS.

Myanmar Financial
Reporting Standards
Myanmar’s main accounting body,
the Myanmar Accountancy Council
(MAC), is responsible for the
adoption and implementation of
the Myanmar Financial Reporting
Standards (MFRS). MFRS has
adopted all International Financial
Reporting Standards (IFRS)
standards except the following:
• IFRS 9: Financial Instruments
• IFRS 10: Consolidated Financial
Statements
• IFRS 11: Joint Arrangements

FRS 12: Disclosure of Interests in
Other Entities
• IFRS 13: Fair Value Measurement
• Interpretations from the Standing
Interpretations Committee (SICs)
and International Financial
Reporting Interpretations
Committee (IFRICs).
Besides the adoption and
implementation of accounting
standards, the MAC also governs
the qualification and certification of
auditors of the country.
The MAC sets a stringent set of
criteria in order to qualify as an
auditor, requiring that all auditors be
either a Certified Public Accountant
(CPA) or hold an accountancy
certificate or degree conferred by
any foreign country recognised by
the Myanmar Accountancy Council.
Additionally, auditors have to be
citizens of Myanmar and registered
with the MAC to obtain a Certificate
of Practice.
The law requires all companies to
submit audited financial statements
to the tax authorities annually by
30 June.
Foreign investors need to be mindful
of potential differences between
MFRS and IFRS when accounting for
their investments in Myanmar.
For example, many power plant
projects are awarded by the
government in the form of Build
Operate and Transfer (BOT)
contracts. MFRS may allow
companies constructing such
infrastructure assets to recognise
them as fixed assets. However, IFRIC
12 Service Concession Arrangements
(which has not been adopted by
MFRS) may preclude the recognition
of fixed assets, as such assets are
usually transferred back to the
government at the end of BOT term
for a nominal consideration.
Under IFRS, the company
undertaking the BOT contract would
instead record the arrangement as a
service contract and recognise both
construction revenue and operating/
maintenance revenue over the
BOT term. Myanmar companies
undertaking such BOT contracts
would therefore need to make an
accounting adjustment to comply
with IFRS before reporting to their
foreign investors.
MAC has also prescribed the MFRS
for Small and Medium Enterprises
(SMEs) which are adopted from IFRS
for SMEs. MFRS for SMEs could
be adopted by entities which are
not publicly accountable, although
they are also allowed to comply
with full MFRS. However, publicly
accountable entities are required to
comply with only full MFRSs.
In addition, MAC has prescribed
a Code of Ethics for Professional
Accountants, Myanmar Standards
on Auditing, a Myanmar Auditing
Practice Statement, Myanmar
Standards on Review Engagements
and Myanmar Standards on
Assurance Engagements.
It is noted that most group companies
in Myanmar do not prepare
consolidated financial statements,
while only the stand alone financial
statements of each group entity are
filed with the authorities. Such a
practice makes it more challenging
for Myanmar group companies
which will need to start preparing
consolidated financials in accordance
with IFRS 10: Consolidated Financial
Statements for the purposes of
reporting results to their foreign
investors meeting loan covenant
requirements of lenders.
Myanmar financial years run from
1 April through 31 March, and
no entities are allowed to choose
different accounting periods for the
purposes of statutory audit and tax