Applying IAS 36 on asset impairment: Practical challenges and limitations in Vietnam

In the era of rapid scientific and technological advancement, enterprises increasingly benefit from innovations and technical progress by investing in fixed assets such as machinery and equipment to enhance production capacity. However, alongside these opportunities come significant challenges, particularly the risk of technological obsolescence, which may lead to a decline in asset value. In Vietnam, the recognition and measurement of fixed asset impairment remain limited due to a lack of detailed and suitable accounting standards that accurately reflect such changes. This study examines the theoretical foundations of asset impairment under International Accounting Standard IAS 36 - Impairment of Assets, aiming to clarify its principles, methods, and relevance in the context of international economic integration. Additionally, the study identifies key difficulties and limitations in the application of IAS 36 within Vietnam’s accounting environment and proposes practical recommendations to enhance its adoption. These solutions are expected to support businesses in aligning with international standards and improving the quality and transparency of financial reporting.