Circular No. 36/2024/TT-BTC Issuing the Vietnam Valuation Standards on Business Valuation

CIRCULAR

Issuing Vietnamese Valuation Standards on Business Valuation

Pursuant to the Price Law dated June 19, 2023;

THE MINISTER OF FINANCE ISSUES THIS CIRCULAR TO AMEND AND SUPPLEMENT SOME PROVISIONS OF CIRCULAR NO. 45/2013/TT-BTC DATED APRIL 25, 2013 OF THE MINISTRY OF FINANCE ON GUIDELINES FOR MANAGEMENT, USE, AND DEPRECIATION OF FIXED ASSETS.

At the proposal of the Director of the Price Management Department,

The Minister of Finance issues this Circular to promulgate the Vietnamese Valuation Standards on Business Valuation.

Article 1. These Vietnamese Valuation Standards on Business Valuation are issued together with this Circular.

Article 2. Effective Date

1. This Circular takes effect from July 1, 2024.

2. Circular No. 28/2021/TT-BTC dated April 27, 2021, of the Minister of Finance, promulgating Vietnamese Standard for Valuation No. 12, shall be repealed from the date this Circular takes effect.

Article 3. Implementation Organization

1. Organizations and individuals related thereto are responsible for implementing the Vietnamese Valuation Standards issued together with this Circular.

2. In the course of implementation, if there are any difficulties, organizations and individuals are requested to promptly report to the Ministry of Finance for study and resolution./.

These Vietnamese Valuation Standards prescribe and guide real estate valuation when conducting valuation according to the laws on prices. These Vietnamese Valuation Standards do not apply to cases of land valuation according to the laws on land.
ON BUSINESS VALUATION

Pursuant to Circular No. 36/2024/TT-BTC dated May 16, 2024

of the Minister of Finance

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

These Vietnamese Valuation Standards prescribe and guide the implementation of business valuation when conducting valuation in accordance with the laws on prices.

Article 2. Applicability

1. Developable real estate is land intended for construction or land with structures that can be renovated or demolished to construct buildings for optimal and most effective use.

2. The residual method is a valuation method that determines the value of developable real estate based on subtracting estimated reasonable development costs (including investor profit) from the estimated development value (total development revenue) to create such development (total development cost).

Article 4. Approaches and Methods of Real Estate Valuation

Article 3. Explanation of Terms

In these Vietnamese Valuation Standards, the following terms are understood as follows:

1. Operating assets are those assets used in the production and business operations of a business and contribute to generating sales revenue and service income or help reduce the main production and business costs of the business.

2. Non-operating assets are those assets not participating in the production and business operations of a business, including: investments in other companies (except in cases where the businesses to be valued are financial investment companies); short-term financial investments; cash and cash equivalents; assets owned and used by the business that do not contribute to generating income for the business but still have value (such as undeveloped assets, unused patents, land use rights, undeveloped land lease rights according to the business plan of the enterprise, or expected to be transferred/sold due to lack of need for use); assets owned and used by the business that generate income for the business but do not contribute to generating sales revenue and service income or do not help reduce the main production and business costs of the business being valued according to its main business activities (such as land use rights, land lease rights developed not in line with the business activities of the business), and other non-operating assets.

3. Continuous operating value of the business is the value of the business currently operating under the assumption that the business will continue to operate after the valuation date.

4. Limited operating life value of the business is the value of the business currently operating under the assumption that the lifespan of the business is finite and the business will cease operations at a future point in time determined.

5. Liquidation value of the business is the value of the business assuming that the assets of the business will be sold individually and the business will soon cease operations after the valuation date.

Article 4. Basis for Valuation

The basis for valuation of a business shall be determined based on the purpose of the valuation, the legal characteristics, economic and technical features, market conditions of the business to be valued, requirements stipulated in the valuation contract (if consistent with the purpose of the valuation), and relevant legal provisions. Other contents shall be implemented in accordance with the Vietnamese Valuation Standards regarding the Basis for Valuation.

Article 5. Business Operation Status and Transaction Status After the Valuation Date

The operational status and transaction status (actual or hypothetical) of the business to be valued after the valuation date shall be determined based on information collected about the business's feasible prospects, its business market, the purpose of the valuation, and legal provisions.

The value of a business is typically the ongoing business value, the limited-term business value, or the liquidation value.

Article 6. Use of Financial Reports in Business Valuation

1. The use of financial reports in business valuation shall be based on the selected approach and method of business valuation, the valuation date, and the characteristics of the business to be valued, while prioritizing the use of audited or reviewed financial reports by independent auditing entities.

2. Comparing and verifying the rationality of financial reports to ensure reliability; in necessary cases, requesting the business to be valued to adjust financial data in the report before incorporating it into information analysis and applying valuation approaches and methods. If the business does not make adjustments, discrepancies must be identified, analyzed clearly, and recorded in the valuation report.

3. In cases where un-audited or un-reviewed financial reports or financial reports with non-unqualified opinions are used, such limitations must be clearly stated in the limitation section of the valuation report and certification or notification of the valuation result to inform the entity or individual requesting the valuation and users of the valuation results.

4. For market-based valuation methods: when using financial data from the business to be valued to calculate indicators such as earnings per share (EPS), pre-tax profit, interest, and depreciation (EBITDA) for market ratio calculations, adjustments must be made to exclude income and expenses from non-operating assets, irregular and non-recurring income and expenses.

5. For income-based valuation methods: when using profit data from the most recent years' financial reports of the business to be valued to forecast future annual income, irregular and non-recurring income and expenses, and income and expenses from non-operating assets must be excluded.

6. Non-recurring costs and profits include restructuring-related costs, gains or losses recognized upon asset sales, changes in accounting estimates, inventory write-downs, impairment of goodwill, debt write-offs, court decision-related losses or benefits, and other non-recurring profits or costs. When making adjustments, the impact of corporate income tax (if applicable) must be considered.

Article 7. Approaches and Methods for Business Valuation

The application of approaches and methods for business valuation must be consistent with the basis of business valuation and the assessment of the operational status of the business at and after the valuation date.

1. Market Approach

The value of the business is determined through the comparison of the value of the business being appraised with that of comparable businesses in terms of factors such as scale; main business activities; business risk, financial risk; financial indicators or successful transaction prices of the business being appraised. The method used in the market approach to determine the value of the business is the average multiple method and the transaction price method.

2. Cost Approach

The value of the business is determined through the value of the business's assets. The method used in the cost approach to determine the value of the business is the asset-based method.

3. Income Approach

The value of the business is determined through the conversion of forecastable future net cash flows to the valuation date. The methods used in the income approach to determine the value of the business include the discounted free cash flow method, the discounted dividend method, and the discounted free cash flow equity method.

When determining the value of the business using the income approach, the value of non-operating assets at the valuation date should be added to the discounted value of forecastable operating assets at the valuation date. In cases where the cash flow of some operating assets cannot be reliably forecasted, the cash flow of these operating assets may not be forecasted, and their individual values can be determined separately and added to the business value. For the dividend discount method, additional non-operating assets such as cash and equivalents are not included.

Article 8. Determining the Value of Shareholders' Equity of the Business

The value of shareholders' equity of the business is determined through the weighted average result of the valuation methods applied when two or more valuation methods are used. The determination of weights is based on the reliability of each method, input data, purpose of the valuation, and related factors.

Chapter II
MARKET APPROACH
Section 1
AVERAGE MULTIPLE METHOD

Article 9. Average Multiple Method

1. The average multiple method estimates the value of shareholders' equity of the business being appraised through the average market ratio of comparable businesses.

2. The market ratios considered for use in the average multiple method include: price-to-earnings ratio (P/E), price-to-sales ratio (P/S), price-to-book ratio (P/B), enterprise value-to-EBITDA ratio (EV/EBITDA), enterprise value-to-sales ratio (EV/S), enterprise value-to-EBIT ratio (EV/EBIT).

3. Comparable businesses are those meeting the following conditions:

a) Similar to the business being appraised in terms of:

Main business activities;

Business risk, financial risk;

Financial indicators, including: Indicators reflecting the scale of the business (book value of shareholders' equity, gross revenue, gross profit from sales and services); Indicators reflecting the growth potential of the business (average annual growth rate of post-tax net income over the last three years); Indicators reflecting the efficiency of business operations (return on equity (ROE), return on assets (ROA));

b) Having information on successfully traded share prices on the market at the valuation date or close to the valuation date but not exceeding one year from the valuation date.

4. Conditions for Applying the Average Multiple Method

There must be at least three comparable businesses. Priority should be given to listed companies on the stock exchange or registered for trading on UPCoM.

5. Principles for Implementing the Average Multiple Method

a) The way to determine financial indicators and market ratios must be consistent for all comparable businesses and the business being appraised;

b) Financial indicators and market ratios of comparable businesses collected from different sources must be reviewed and adjusted to ensure consistency in the method of determination before being used in the valuation.

6. Implementation Method of the Average Multiple Method

a) Evaluate and select comparable businesses according to the provisions of Clause 3 of this Article;

b) Determine the market ratios to be used to estimate the value of shareholders' equity of the business being appraised;

c) Estimate the value of shareholders' equity of the business being appraised based on appropriate market ratios and make other adjustments.

Article 10. Determining the market ratios to estimate the value of shareholders' equity of the enterprise to be appraised

The determination of the market ratios to estimate the value of shareholders' equity of the enterprise to be appraised shall be carried out as follows:

1. Calculating the market ratios of the comparable enterprises, then using at least three of the following market ratios: price-to-earnings ratio (P/E), price-to-sales ratio (P/S), price-to-book value ratio of average shareholders' equity (P/B), enterprise value-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio, enterprise value-to-sales ratio (EV/S), enterprise value-to-earnings before interest and taxes (EBIT) ratio.

average ownership ratio ( ), enterprise value to pre-tax profit ratio, interest expense and depreciation average ratio (——), enterprise value to average net revenue ratio

(S), enterprise value to average pre-tax profit and interest expense ratio (EBIT).

average equity ratio (S), the ratio of enterprise value to earnings before interest and tax (EBIT) on average.

2. Selecting the market ratios to estimate the value of shareholders' equity and the value of the enterprise to be appraised based on considering the suitability of the market ratios according to the scale, characteristics of the enterprise, industry, market, and comparability. The market ratios of the comparable enterprises need to be evaluated and adjusted before applying them to calculate the value of shareholders' equity. In cases where market ratios are adjusted, these adjustments are based on data (if available), experience, and market surveys or market studies.

3. Notes on determining the market ratios

a) Earnings per share (EPS) is determined based on the income of the most recent year compared to the appraisal date, and adjustments must be made for non-operating assets of the comparable enterprises.

b) The share price of the comparable enterprise is taken from the reference price on the latest trading day of these shares on the stock exchange at the appraisal date, and these shares must have traded within 30 days prior to the appraisal date. In cases where the shares of the comparable enterprise are not listed on the stock exchange or registered for trading on UPCoM, the share price of the comparable enterprise is the successful transaction price of these shares on the nearest market to the appraisal date but not more than one year from the appraisal date.

c) The book value of the shares in the P/B ratio needs to take into account the deduction of the book value of intangible fixed assets (these intangible fixed assets do not include land use rights, exploitation rights of assets on land) to limit the impact of accounting regulations on intangible fixed assets that may distort the appraisal results when the comparable enterprises and the enterprise to be appraised have intangible fixed assets in their balance sheets. In cases where the book value of intangible fixed assets is not deducted, the reasons must be clearly stated.

d) The parameters of the enterprise values (EV) of the comparable enterprises in the market ratios EV/EBITDA, EV/EBIT, and EV/S are calculated according to the following formula:

Where:

The value of debt with capital cost, the value of preferred shares, benefits of non-controlling shareholders, the value of cash and cash equivalents are determined according to the book value. In cases where there is insufficient information to determine the value of debt with capital cost, the value of loans and finance leases according to the book value shall be taken.

In cases where the enterprise has issued convertible securities, option securities, it is necessary to evaluate and consider converting these securities into common shares if appropriate when determining the market capitalization of the enterprise.

e) EBITDA and EBIT of the comparable enterprises do not include income from cash and cash equivalents and do not include income and expenses arising from non-operating assets.

Article 11. Estimating the Value of Shareholders' Equity of the Enterprise to be Valued

1. Determining the Average Market Multiple for Each Market Multiple

The average market multiple is determined by calculating the arithmetic mean of the market multiples of the comparable enterprises or by calculating the weighted average of the market multiples of the comparable enterprises.

The determination of the weight of each market multiple for each comparable enterprise is based on an analysis of the similarity of the comparable enterprise to the enterprise to be valued.

2. Determining the Value of the Enterprise to be Valued, the Value of Shareholders' Equity of the Enterprise to be Valued According to Each Average Market Multiple Calculated Annually

a) Determining the value of the enterprise to be valued, the market value of shareholders' equity of the enterprise to be valued according to the enterprise value-to-EBITDA multiple, the enterprise value-to-pre-tax profit and interest expense multiple, and the enterprise value-to-revenue multiple of the comparable enterprises:

In which the EBITDA of the enterprise to be valued does not include income from cash and cash equivalents and income and expenses arising from non-operating assets.

b) Determining the value of shareholders' equity of the enterprise to be valued according to the market multiple P, P, P

Determining the value of shareholders' equity of the enterprise to be valued according to the price-to-income ratio of the comparable enterprises:

The value of shareholders' equity of the enterprise to be valued = Post-tax net income × Average P/E ratio of the comparable enterprises in the most recent year of the enterprise to be valued.

Determining the value of shareholders' equity of the enterprise to be valued according to the price-to-book value ratio of the comparable enterprises:

The value of shareholders' equity of the enterprise to be valued = Book value of shareholders' equity × Average P/B ratio of the comparable enterprises at the valuation date.

Determining the value of shareholders' equity of the enterprise to be valued according to the price-to-sales ratio of the comparable enterprises:

The value of shareholders' equity of the enterprise to be valued = Net revenue of the most recent year of the enterprise to be valued × Average P/S ratio of the comparable enterprises.

3. Estimating the Value of Shareholders' Equity of the Enterprise to be Valued Using the Average Multiple Method

The value of shareholders' equity of the enterprise to be valued using the average multiple method is determined by calculating the arithmetic mean of the results of the value of shareholders' equity of the enterprise to be valued determined according to each selected average market multiple or by calculating the weighted average of the results. The determination of the weight for each result may be based on an assessment of the degree of similarity between the comparable enterprises for each type of market multiple used to calculate that result, with the principle being: the higher the degree of similarity between the comparable enterprises for a particular market multiple, the greater the weight of the result using that market multiple.

Section 2

MARKET APPROACH METHOD

Article 12. Transaction Pricing Method

1. The transaction pricing method estimates the value of a company's equity through the successful transfer prices of contributed capital shares or share transfers on the market of the company being appraised.

2. Conditions for applying the transaction pricing method

The company being appraised must have at least three successful transactions of contributed capital shares or share transfers on the market; simultaneously, the transaction date must not exceed one year from the appraisal date.

3. Principles of Implementation: It is necessary to evaluate and consider adjusting the prices of successful transactions to be consistent with the appraisal date if necessary.

Article 13. Estimating Equity Value Using the Transaction Pricing Method

The equity value of the company being appraised is calculated based on the average price according to the volume of at least three successful transactions of contributed capital shares or share transfers closest to the appraisal date.

In cases where the company being appraised is a listed company on the stock exchange or has registered for trading on UPCoM, the share price for calculating the market equity value is the transaction price or reference price of the company's shares at or nearest to the appraisal date within thirty days prior to the appraisal date.

Chapter III

APPROACH FROM COST

Article 14. Asset-Based Method

1. The asset-based method is a method of estimating the value of a company being appraised by totaling the value of assets owned and used by the company being appraised.

2. Implementation principles

a) Assets considered during the appraisal process are all assets of the company based on the inventory data of the company being appraised; the value of these assets is appraised according to the guidelines set out in this Standard and other Vietnamese valuation standards; in cases where there is no information or documentation for appraisal, it is necessary to analyze and argue in the appraisal report, then determine based on actual costs incurred and recorded in the accounting books.

b) When appraising a company based on market value, the value of the company's assets at the appraisal date is the market value of those assets and is carried out in accordance with Article 15 of this Standard.

c) Intangible assets that do not meet the conditions for recording in the accounting books (trade names, trademarks, patents, industrial designs, etc.) and other assets not recorded in the accounting books need to apply appropriate valuation methods to determine their values.

d) For assets recorded in foreign currency: The foreign currency exchange rate is applied according to the guidance of the Vietnamese Accounting Standards when preparing and presenting financial statements.

3. Implementing the asset-based method includes:

a) Estimating the total value of tangible assets and financial assets of the company being appraised;

b) Estimating the total value of intangible assets of the company being appraised;

c) Estimating the equity value of the company being appraised.

Article 15. Estimation of the total value of tangible assets and financial assets of the enterprise to be appraised

The estimation of market value of tangible assets and financial assets of the enterprise shall be carried out according to one of the appraisal methods prescribed in the Vietnamese Appraisal Standards on the market approach, cost approach, income approach, and other relevant Vietnamese Appraisal Standards.

In addition, the estimation of market value of tangible assets and financial assets shall be conducted in accordance with the following guidelines.

1. Determining asset value in monetary terms

a) Cash is determined based on the cash count report of the enterprise to be appraised;

b) Deposits are determined based on the reconciled balance or passbook with the bank where the enterprise to be appraised has an account at the time of valuation;

c) Foreign currency cash and deposits are determined according to the principle set forth in point d, Clause 2, Article 14 of this Standard.

2. Determining investment value

The values of investments of the enterprise to be appraised shall be determined as follows:

a) In cases where the enterprise (the enterprise to be appraised for capital contribution or share purchase) has successful transactions of transferring capital or shares on the market, the value of capital contributions or share purchases is determined based on the market value of equity of the enterprise that the enterprise to be appraised has invested in. The market value of equity of the enterprise that the enterprise to be appraised has invested in is determined according to the methods stated in this Standard or as follows:

In cases where the shares of enterprises not listed on the stock exchange or registered for trading on UPCoM, and the successful transactions of transferring capital or shares on the market satisfy both conditions: (i) over 50% of the equity of the enterprise is transferred in all transactions; (ii) the transaction date does not exceed 01 year from the valuation date, then the value of the investments of the enterprise to be appraised is determined based on the average transfer price per volume of the nearest transactions before the valuation date.

In cases where the investment is shares of enterprises listed on the stock exchange or registered for trading on UPCoM, the value of the investments is determined based on the share price, which is the reference price of the shares of the enterprise to be appraised at the valuation date and there must have been a transaction of these shares within 30 days prior to the valuation date or at the valuation date.

b) In cases where the enterprise (the enterprise to be appraised for capital contribution or share purchase) does not have successful transactions of transferring capital or shares on the market, the value of capital contributions or share purchases is determined as follows:

In cases where the enterprise to be appraised holds 100% of the equity of the invested enterprises: the value of the investment is determined based on the value of the invested enterprise and is determined according to the methods stated in this Standard.

In cases where the enterprise to be appraised holds from 50% to less than 100% of the equity of the invested enterprises: the value of the investments is determined based on the equity value of the enterprises that the enterprise to be appraised has invested in. The equity value of the enterprises that the enterprise to be appraised has invested in is determined according to the methods stated in this Standard; if it is not applicable according to the methods stated in this Standard, it is determined as follows:

(i) For the discounted cash flow method: the cost of equity is estimated based on the average return on equity over the past five years, the equity cash flow can be forecasted based on retained earnings data, the growth rate of return on equity over the past five years.

(ii) For the average ratio method: it is necessary to estimate the ratios P, P and the

ratios $\frac{P}{B}$, $\frac{P}{E}$ averages may be estimated based on the ratios $\frac{P}{B}$, $\frac{P}{E}$ of at least three enterprises in the same industry.

(iii) The value of the investment is determined based on: the proportion of the investment capital of the enterprise to be appraised in the total contributed capital at other enterprises and the equity value at other enterprises according to audited or reviewed financial statements. If not audited or reviewed, the basis is the equity value according to the most recent financial statement of that enterprise to determine and must be clearly stated in the limitations section of the appraisal certificate and the appraisal report.

In cases where the enterprise to be appraised holds less than 50% of the equity of the invested enterprises: the value of the investments is determined according to the methods stated in Chapter II of the Standard or according to the guidance at points (i), (ii), (iii); if implemented according to the guidance at point (iii), it must be clearly stated in the limitations section of the appraisal certificate and the appraisal report.

3. Determining the value of receivables and payables

a) Reconcile the receivables and payables recorded in the accounting books with related documents and records collected during the appraisal process; if necessary, request the enterprise to be appraised to verify and confirm the figures again;

b) The value of receivables and payables is determined based on the relevant evidence provided; if there is insufficient evidence, it is necessary to analyze, argue, and propose assumptions about the recoverability based on the figures in the accounting books.

c) In cases where relevant documents such as reconciliation records, confirmation of receivables and payables, or records of receipts and payments occurring after the financial statement closing date are not provided, it must be clearly stated in the limitation section of the valuation certification report or valuation report for users of the valuation results to consider when using these results.

4. Determining the value of inventory

a) The cost of unfinished business operations is determined based on actual costs incurred and recorded in the accounting books. If the enterprise requiring valuation is the project sponsor with unfinished business operation costs related to the creation of future real estate assets, the value of the land use rights of the enterprise requiring valuation (if included in the future asset) should be determined according to the Vietnamese Valuation Standards approach from the market, income approach, and real estate valuation; for construction items, the value is determined based on actual costs incurred and recorded in the accounting books.

b) For inventory that consists of finished goods or real estate products, their values are determined according to Vietnamese Valuation Standards.

c) For inventory consisting of raw materials, tools, and equipment that have been stored for a long time due to production errors, unfinished products that cannot continue to be completed due to non-saleability, changes in production products... leading to poor quality, the enterprise must prepare a statistical table, classify them, and request valuation at the recoverable value based on the principle of best and most efficient use.

d) For inventory consisting of raw materials, tools, and equipment serving normal operational and production needs, which are in circulation, the value is determined based on actual costs incurred recorded in the accounting books.

5. Determining the value of tangible fixed assets

a) For tangible fixed assets such as buildings, structures, and individual investment real estate projects (where the scale of the project or construction unit price, investment capital cannot be determined): they may be recorded at historical cost adjusted for inflation, less depreciation at the valuation date:

b) For tangible fixed assets such as machinery, transportation equipment, transmission equipment, management equipment and tools:

In cases where there are no comparable transaction assets on the market and insufficient investment documentation or technical documentation: collect, argue, and analyze information and store evidence of the absence of comparable transaction assets on the market, the value of these assets is determined based on the historical cost recorded in the accounting books (adjusted for exchange rate differences if imported assets at the valuation date) and less depreciation at the valuation date.

In cases where the value is determined based on the book historical cost as guided above: clearly state this limitation in the limitation section of the valuation certification report and valuation report.

6. Determining the value of tools and equipment that have been issued for use

The value of tools and equipment is determined based on the market transaction price of comparable assets. In cases where the market transaction price of comparable assets cannot be collected, the value of tools and equipment is determined based on the transaction price of new tools and equipment of the same type or with equivalent features or based on the initial purchase price recorded in the accounting books less depreciation at the valuation date.

In cases where the value of tools and equipment is determined based on the book value: clearly state this limitation in the limitation section of the valuation certification report and valuation report.

7. Determining short-term and long-term deposits according to the accounting ledger.

8. The value of financial assets in the form of contracts should prioritize the application of the discounted cash flow method.

9. The value of unfinished basic construction: determined similarly to unfinished business operation costs.

Article 16. Estimation of the total value of intangible assets of the enterprise to be appraised

The value of the enterprise's intangible assets to be appraised is calculated as the sum of the values of identifiable intangible assets and unidentifiable intangible assets. The intangible assets of the enterprise to be appraised include recorded intangible fixed assets in accounting books, other intangible assets satisfying the conditions stipulated in the Vietnamese Valuation Standard on Intangible Asset Valuation, and unidentifiable intangible assets.

The total value of the enterprise's intangible assets to be appraised is determined through one of the following methods:

1. Method 1: Estimating the total value of the enterprise's intangible assets to be appraised by estimating the value of each identifiable intangible asset and the value of unidentifiable intangible assets (remaining intangible assets).

Determining the value of each identifiable intangible asset is carried out according to the provisions of the Vietnamese Valuation Standard on Intangible Asset Valuation. Specifically, the value of land use rights and leasehold rights is determined according to the provisions of the Vietnamese Valuation Standard on market approach, income approach, and real estate valuation.

Determining the value of unidentifiable intangible assets (including brand and other unidentifiable intangible assets) is carried out as follows:

a) Estimating the market value of the enterprise's assets to be appraised (excluding unidentifiable intangible assets) participating in the process of generating income for the enterprise to be appraised. The market value of these assets is determined according to Article 15 of this Standard and guidelines in other Vietnamese Valuation Standards;

b) Estimating the annual income that the enterprise to be appraised can achieve, usually determined through the FCFF value specified in Clause 2, Article 19 of this standard. This income level is the income under normal business conditions of the enterprise to be appraised, estimated based on the results achieved by the enterprise to be appraised in recent years, taking into account the development prospects of the enterprise after excluding abnormal factors affecting income such as gains or losses from the disposal of fixed assets, revaluation of financial assets, exchange rate risks;

c) Estimating appropriate profit rates for the enterprise's assets to be appraised (excluding unidentifiable intangible assets) participating in the process of generating income for the enterprise to be appraised. The profit rate of tangible assets does not exceed the weighted average cost of capital of the enterprise to be appraised. The profit rate of identifiable intangible assets is not lower than the weighted average cost of capital of the enterprise to be appraised. The determination of the weighted average cost of capital of the enterprise to be appraised is carried out according to the guidelines in Article 20 of this Standard;

d) Estimating the annual income generated by the assets (of the enterprise to be appraised but excluding unidentifiable intangible assets) participating in the process of generating income for the enterprise to be appraised by multiplying the value of these assets determined at point a of this clause with the corresponding profit rates determined at point c of this clause;

đ) Estimating the income generated by unidentifiable intangible assets for the enterprise to be appraised by subtracting (-) the income generated by the assets (of the enterprise to be appraised but excluding unidentifiable intangible assets) participating in the process of generating income for the enterprise to be appraised, as determined at point d of this clause, from the income that the enterprise to be appraised can achieve, as determined at point b of this clause;

e) Estimating an appropriate capitalization rate for the income generated by unidentifiable intangible assets for the enterprise to be appraised. This capitalization rate must be at least equal to the cost of equity capital of the enterprise to be appraised. The determination of the cost of equity capital of the enterprise to be appraised is regulated in Clauses 6, 7, 8, and 9 of Article 20 of this Standard;

g) Estimating the value of unidentifiable intangible assets of the enterprise to be appraised by capitalizing the portion of income generated by these intangible assets for the enterprise to be appraised.

2. Method 2: Estimating the total value of the enterprise's intangible assets to be appraised through capitalizing the stream of profits generated by all intangible assets for the enterprise to be appraised.

a) Estimating the market value of the enterprise's assets to be appraised (excluding intangible assets) participating in the process of generating income for the enterprise to be appraised. The market value of financial assets and tangible assets is determined according to Article 15 of this Standard;

b) Estimating the annual income that the enterprise to be appraised can achieve, usually determined through the FCFF value specified in Clause 2, Article 19 of this standard. This income level is the income under normal business conditions of the enterprise to be appraised, estimated based on the results achieved by the enterprise to be appraised in recent years, taking into account the development prospects of the enterprise after excluding abnormal factors affecting income such as gains or losses from the disposal of fixed assets, revaluation of financial assets, exchange rate risks;

c) Estimating appropriate profit rates for the enterprise's assets to be appraised (excluding intangible assets) participating in the process of generating income for the enterprise to be appraised. These profit rates must not exceed the weighted average cost of capital of the enterprise to be appraised. The determination of the weighted average cost of capital of the enterprise to be appraised is carried out according to the guidelines in Article 20 of this Standard;

d) Estimating the annual income generated by the assets (of the enterprise to be appraised but excluding intangible assets) participating in the process of generating income for the enterprise to be appraised by multiplying the value of these assets determined at point a of this clause with the corresponding profit rates determined at point c of this clause;

đ) Estimating the income generated by all intangible assets for the enterprise to be appraised by subtracting (-) the income generated by the assets for the enterprise to be appraised, as determined at point d of this clause, from the income that the enterprise to be appraised can achieve, as determined at point b of this clause;

e) Estimate an appropriate capitalization rate for the income generated by all intangible assets of the enterprise to be appraised. This capitalization rate must be at least equal to the cost of equity capital of the enterprise to be appraised. The determination of the cost of equity capital of the enterprise to be appraised shall be in accordance with Clauses 6, 7, 8, and 9 of Article 20 of this Standard.

g) Estimate the total value of intangible assets of the enterprise to be appraised by capitalizing the portion of income generated by intangible assets for the enterprise to be appraised.

Article 17. Estimating the Value of Equity Capital of the Enterprise to be Appraised

The value of equity capital of the enterprise to be appraised is determined according to the following formula:

In which: The value of liabilities payable to be appraised is determined based on market price if there is market evidence, otherwise it is determined based on book value.

Chapter IV
APPROACH BASED ON INCOME

Article 18. Discounted Cash Flow Method for the Enterprise

1. The discounted cash flow method for the enterprise determines the value of the enterprise to be appraised through estimating the total of the present value of the discounted free cash flow of the enterprise to be appraised and the current value of non-operating assets of the enterprise at the time of appraisal.

2. Implementation principles

In the case where the enterprise to be appraised is a joint-stock company, the discounted cash flow method for the enterprise is applied under the assumption that the preferred shares of the enterprise to be appraised are treated as common shares. This valuation needs to be clearly stated in the limitations section of the appraisal certificate and the appraisal report.

3. The implementation of the discounted cash flow method for the enterprise includes:

a) Forecasting the free cash flow of the enterprise to be appraised (FCFF);

b) Estimating the weighted average cost of capital of the enterprise to be appraised (WACC);

c) Estimating the terminal value forecast (Vn);

d) Estimating the value of equity capital of the enterprise to be appraised (V0).

Article 19. Forecasting Free Cash Flow of the Enterprise to be Appraised

1. The estimation of the forecast period for cash flow is based on the characteristics of the enterprise, the industry, and economic conditions to select suitable growth models. The minimum forecast period for cash flow is three years. For newly established enterprises or those experiencing rapid growth, the forecast period may extend until the enterprise enters a steady growth phase. For enterprises operating with a limited term, the determination of the forecast period for cash flow requires consideration of the age of the enterprise.

2. The formula for calculating annual free cash flow of the enterprise is as follows and other equivalent formulas derived from this formula.

FCFF = Earnings Before Interest After Tax (EBIAT) + Depreciation - Capital Investment - Net Change in Working Capital outside cash and short-term non-operating assets (difference in net working capital)

a) Earnings Before Interest After Tax (EBIAT) is earnings before interest after tax excluding profits from non-operating assets.

The formula for calculating EBIAT from Earnings Before Interest and Tax (EBIT) is as follows:

EBIAT = EBIT x (1-t)

Where:

c: corporate income tax rate

During the period with financial statements, the effective tax rate is used to calculate EBIAT: effective t = (Pre-tax profit - Post-tax profit) ÷ Pre-tax profit.

During the forecast period for cash flow, the current corporate income tax rate is used to calculate EBIT;

b) Capital investment includes: investment in fixed assets and other long-term assets; investment in operating assets included in the group of purchasing debt instruments of other entities and investment in operating assets contributed to other entities (if any);

c) The formula for calculating working capital outside cash and short-term non-operating assets:

Working capital outside cash and short-term non-operating assets = (Short-term receivables + Inventory + Other short-term assets) - Short-term liabilities not including short-term borrowings.

Article 20. Estimating the weighted average cost of capital for the enterprise to be appraised

1. The weighted average cost of capital for the enterprise to be appraised shall be estimated for each period or for the entire forecast period of future cash flows to serve as the discount rate for the corresponding period when converting free cash flows and the forecast terminal value (if any) to the appraisal date. Using a single discount rate for the entire forecast period or using different discount rates for each forecast period must be argued and clearly stated in the appraisal report.

2. Formula for the weighted average cost of capital of the enterprise

WACC = Rd x Fd x (1 - T) + Re x Fe

Where:

WACC: Weighted Average Cost of Capital

Rj: Cost of debt

Proportion of debt to total capital

T: Corporate income tax rate

R: Cost of equity

Proportion of equity to total capital

Total capital consists of sources of funding for the enterprise's operations, including equity and debt with interest costs expected to finance the enterprise's activities during the forecast period. This debt includes both short-term and long-term debt but must satisfy two conditions: it must bear interest costs and be expected to finance the enterprise's activities during the forecast period.

3. Estimating the proportion of debt to total capital (Fd)

a) The proportion of debt to total capital (Fd) is the ratio of debt with interest costs expected to finance the enterprise's operations during the forecast period to total capital;

b) It is necessary to base on the type of valuation basis used, information provided by the enterprise to be appraised regarding its capital usage plans to analyze the need and ability to borrow funds in the near future, evaluate the capital structure of similar companies to estimate the proportion of debt with interest costs expected to finance the enterprise's operations during the forecast period. At the same time, it is necessary to assess and consider the estimation of R_d corresponding to the discount rate (WACC) for each period within the forecast period of the enterprise to be appraised;

c) The proportion of debt to total capital (Fd) is determined based on the assessment and evaluation of the proportion of debt with interest costs to total capital of enterprises in the same production and business sector as the enterprise to be appraised or determined according to the proportion of debt with interest costs to total capital of the enterprise to be appraised in the most recent years considering the future capital structure.

In the case where the enterprise to be appraised has been listed on the Vietnamese stock market for at least three years up to the appraisal date: assess and consider basing on the proportion of debt with interest costs to total capital of the enterprise to be appraised in the most recent years considering the future capital structure.

4. Estimating the cost of debt (Rd)

The cost of debt (Rd) is determined based on the interest costs of debts with interest costs expected to finance the enterprise's operations during the forecast period.

In the case where there is no debt with interest costs in the capital structure of the enterprise to be appraised, Rd is determined based on the expected interest rate. The expected interest rate is estimated based on the assessment of the enterprise's negotiation capability with credit providers or the long-term borrowing interest rates of enterprises in the same production and business sector as the enterprise to be appraised.

In the case where the enterprise to be appraised has debt with interest costs, Rd is determined based on this interest cost or the aforementioned expected interest rate; at the same time, an assessment and consideration are made to estimate Rd appropriately. In the case where the enterprise has multiple debts with different interest costs (such as different interest rates), Rd is determined as the weighted average interest rate of the enterprise's debts.

5. Estimating the proportion of equity

The proportion of equity is determined according to the formula: Fc = (1 - Fd)

6. Estimating the cost of equity (Re)

The estimation of the cost of equity (Re) is carried out according to one of the three methods prescribed in Clause 7, Clause 8, and Clause 9 of this Article.

7. Method 1 for estimating the cost of equity (Re)

a) Application condition: There are at least three enterprises in the same business sector as the enterprise to be appraised that have shares listed or registered for trading on the Vietnamese stock market; or the enterprise to be appraised is a company listed on the Vietnamese stock market for at least three years up to the appraisal date;

b) In the case where Method 1 is not applied, the reasons and grounds for not choosing this method must be stated in the appraisal report, and Method 2 or Method 3 as prescribed in Clause 8 and Clause 9 of Article 20 of this Standard must be selected;

c) General formula:

R{0}=R{1}+\beta_{L}\times MRP

Where:

Ri: Risk-free return rate at or near the appraisal date

MRP: Market risk premium

β: Systematic risk coefficient of the enterprise to be appraised

The risk-free return rate (Rf) is estimated based on the interest rate of government bonds with a term of 10 years or the longest term at or near the appraisal date.

Part on Market Risk Premium (MRP) is estimated through calculating the average difference between the rate of return from investing in the stock market (R'm) at the end of each month's trading session and the risk-free rate of return (R'f). R'f is determined based on the interest rate of 10-year or longest-term government bonds at the corresponding time or close to the time when R'm is determined. The expected rate of return from investing in the Vietnamese stock market is estimated using statistical methods based on the VN-INDEX over a minimum period of the five most recent years up to the valuation date. The VN-INDEX is calculated monthly, specifically the closing index of the last trading session of the month.

The determination of the Systematic Risk Coefficient taking into account the impact of capital structure (β_L) is carried out using the regression method of the adjusted reference price fluctuation of shares with the market price fluctuation.

d) The determination of the Systematic Risk Coefficient taking into account the impact of capital structure (βL) is carried out using the regression method of the adjusted reference price fluctuation of shares with the market price fluctuation according to the formula:

Covariance (rate of return of the stock, rate of return of the market)

Variance of the rate of return of the market

In which the price fluctuation is determined monthly and a minimum of five years (for enterprises without sufficient data for five years, it is calculated from the day the enterprise is listed or registered for trading), the rate of return of the market is calculated based on the VN-INDEX.

In cases where there is evidence and basis for the βL coefficient published on the market under similar calculation conditions, this published βL can be used.

đ) The risk coefficient taking into account the impact of capital structure (βL) is estimated as follows:

In cases where the enterprise to be valued has been listed on the Vietnamese stock market for not less than three years up to the valuation date: evaluate and consider the determination of βL from the share transaction price of the enterprise to be valued in the years closest to the valuation date or determine βL according to similar enterprises in the same industry, while providing reasons for choosing this calculation method in the valuation report.

In other cases: select at least three enterprises in the same industry as the enterprise to be valued on the stock market and determine the βL coefficient of the enterprises to be valued through the βL of these enterprises.

e) When there are differences in capital structure between the enterprise to be valued and similar enterprises in the same industry, the risk coefficient of similar enterprises must be adjusted according to the capital structure of the enterprise to be valued. This adjustment includes:

Eliminating the influence of capital structure in the risk coefficient according to the formula:

Where:

Unlevered Beta

D: Proportion of debt with cost of capital usage over equity of enterprises in the same industry as the enterprise to be valued.

D/E is calculated on average over the same number of years as the data collection period for β.

T: Corporate income tax rate

Calculating the average unlevered beta of enterprises in the same industry as the enterprise to be valued.

Estimating the risk coefficient taking into account the impact of capital structure (βL) of the enterprise to be valued according to the formula

$\beta{L}$_thẩm định = $\beta{U}$_average x (1 + $\frac{D}{E}$ x (1 - 1))

Where:

βL_thẩm định: Risk coefficient taking into account the impact of capital structure of the enterprise to be valued.

Average unlevered beta: Average unlevered beta.

E: Proportion of debt with cost of capital usage over equity of the enterprise to be valued.

The D/E ratio needs to reflect future financial leverage and may be determined based on the D/E ratio at the valuation date.

1: Corporate income tax rate.

8. Method 2 for estimating the cost of equity capital (Re).

a) General formula:

Re = RF + βL × MRP + Country risk premium + Currency risk premium (if applicable)

Where:

RISK: The risk-free rate of return is estimated based on the interest rate of 10-year or longest-term US government bonds at the corresponding time or close to the valuation date.

MRP US: Market risk premium in the United States.

βL: Systematic risk coefficient of enterprises in the same industry as the enterprise to be valued in the US, adjusted according to the capital structure of the enterprise to be valued.

b) The determination of Re is based on evaluation, argumentation, and adjustment of Re according to the scale, liquidity, and other relevant factors to reflect the specific risks of the enterprise to be valued.

9. Method 3 for estimating the cost of equity capital (Re).

General formula:

$Re=Rf+Ry$

The risk-free rate of return (Rf) is estimated based on the interest rate of 10-year or longest-term government bonds at the corresponding time or close to the valuation date.

Part on Risk Premium for Equity (R_p) is determined based on the risk premium for equity of Vietnam published in reliable international financial databases.

The determination of R_{Average loan repayment period is 10 years;} is carried out based on evaluation, argumentation, and adjustment of R_{Average loan repayment period is 10 years;} according to scale, liquidity, and other relevant factors to reflect the specific risks of the enterprise being appraised.

Article 21. Estimation of Terminal Value Forecast

1. Case 1: Cash flow after the forecast period is a non-growing perpetuity.

Formula for calculating the forecast terminal value:

Where:

FCFF_{n+1}: Free cash flow of the enterprise in year n + 1

2. Case 2: Cash flow after the forecast period is a constant growth perpetuity each year.

Formula for calculating the forecast terminal value:

Where:

g, rate of cash flow growth

The rate of cash flow growth is determined based on the profit growth rate. The profit growth rate is forecasted based on factors such as: assessment of the enterprise's development prospects, the enterprise's past profit growth rate, business production plans, reinvestment ratio, retained earnings ratio.

3. Case 3: The enterprise ceases operations at the end of the forecast period. The forecast terminal value is determined based on the liquidation value of the enterprise being appraised.

Article 22. Estimation of the Enterprise's Equity Value Being Appraised

1. Calculate the present value of free cash flows and the forecast terminal value after discounting the enterprise's free cash flows and forecast terminal value using the weighted average cost of capital as the discount rate.

V₀ = ∑_i=1ⁿ (FCFF / (1 + WACC)) + Vₙ / (1 + WACC)ⁿ

2. Estimate the value of non-operating assets of the enterprise according to the guidelines for determining the value of tangible assets, intangible assets, and financial assets under this standard and related Vietnamese valuation standards.

3. Estimate the enterprise's equity value being appraised at the appraisal date by adding the present value of the enterprise's free cash flows and forecast terminal value with the value of the enterprise's non-operating assets being appraised, subtracting the value of debt liabilities with capital usage costs and debt liabilities without capital usage costs recorded in the related financial statements that form the non-operating asset value at the appraisal date (if any but not reflected in the annual free cash flows of the enterprise).

Section 2
DISCOUNTED FREE CASH FLOW EQUITY METHOD

Article 23. Discounted Free Cash Flow Equity Method

1. The discounted free cash flow equity method determines the equity value of the enterprise being appraised through the estimation of the total discounted free cash flow equity value of the enterprise being appraised.

2. Implementation principles

For joint-stock companies being appraised, the discounted free cash flow equity method is applied assuming that the preferred shares of the enterprise being appraised are like common shares. This assumption must be clearly stated in the limitations section of the valuation certificate and valuation report.

3. Implementation of the discounted free cash flow equity method includes:

a) Forecasting the free cash flow equity of the enterprise being appraised (FCFE);

b) Estimating the cost of equity capital of the enterprise being appraised (R_e);

c) Estimating the forecast terminal equity value (Vn+1):

d) Estimating the value of equity capital of the enterprise to be appraised (V0).

Article 24. Forecasting Free Cash Flow of Shareholders' Equity for Enterprises to be Appraised

1. The estimation of the forecast period for cash flow is based on the characteristics of the enterprise, the industry it operates in, and the economic context to select appropriate growth models. The minimum forecast period for cash flow is three years. For newly established enterprises or those experiencing rapid growth, the forecast period may extend until the enterprise enters a steady growth phase. For enterprises with a limited operating term, determining the forecast period requires evaluating the age of the enterprise.

2. Formula for Calculating Free Cash Flow of Shareholders' Equity for Enterprises

FCFE = Net Profit After Tax + Depreciation - Capital Investment Expenditure - Net Change in Working Capital and Non-operating Short-term Assets (Difference in Net Operating Assets) - Principal Repayment Amounts + New Debt Issuance

a) Net Profit After Tax is net profit after tax excluding profits from non-operating assets;

b) Capital Investment Expenditure includes: expenditure on fixed assets and similar long-term assets that do not meet the criteria for recognition as fixed assets under the enterprise accounting system; expenditure on other long-term operational assets within the category of purchasing debt instruments of other entities and investment capital contributions to other entities (if applicable);

c) The formula for calculating working capital outside cash and short-term non-operating assets:

Working capital outside cash and short-term non-operating assets = (Short-term receivables + Inventory + Other short-term assets) - Short-term liabilities not including short-term borrowings.

Article 25. Estimating the Cost of Using Shareholders' Equity for Enterprises to be Appraised

The estimation of the cost of using shareholders' equity for enterprises to be appraised shall follow the guidelines set out in Clause 6, Clause 7, Clause 8, and Clause 9 of Article 20 of this Standard.

Article 26. Estimating the End-of-Prediction Period Value of Shareholders' Equity

1. Case 1: Cash flow after the prediction period is constant and extends indefinitely. The formula for calculating the end-of-prediction period value is:

Where:

FCFE_{n+1}: Shareholders' equity cash flow in year n + 1.

2. Case 2: Cash flow after the prediction period grows steadily each year and extends indefinitely. The formula for calculating the end-of-prediction period value is:

$V{n}=\frac{FCFE{n+1}}{R_{e}-g}$

Where:

g: rate of growth of shareholders' equity cash flow.

The rate of growth of shareholders' equity cash flow is forecasted based on factors such as the rate of growth of post-tax operating profit, the development prospects of the enterprise, the historical growth rate of cash flow of the enterprise, production and business plans, and the reinvestment ratio.

3. Case 3: The enterprise ceases operations at the end of the prediction period. The end-of-prediction period value is determined according to the liquidation value of the enterprise to be appraised.

Article 27. Estimating the Value of Shareholders' Equity for Enterprises to be Appraised

1. Calculate the present value of the free cash flow of shareholders' equity and the end-of-prediction period value of shareholders' equity of the enterprise after discounting the free cash flow of shareholders' equity and the end-of-prediction period value of shareholders' equity of the enterprise at the cost of using shareholders' equity.

V₀ = ∑ₙ₌₁ⁿ FCFE / (1 + Rₑ) + Vₙ / (1 + Rₑ)ⁿ

2. Estimate the value of non-operating assets of the enterprise according to the guidelines for determining the value of tangible assets, intangible assets, and financial assets under this standard and related Vietnamese valuation standards.

3. Estimate the value of shareholders' equity for enterprises to be appraised by adding the present value of the free cash flow of shareholders' equity and the present value of the end-of-prediction period value of shareholders' equity to the value of non-operating assets, then subtracting the value of liabilities without financing costs recorded on the financial statements related to the formation of non-operating assets at the time of appraisal (if applicable but not reflected in the free cash flow of the enterprise).

Section 3
DISCOUNTED CASH FLOW METHOD

Article 28. Dividend Discount Method

1. The dividend discount method determines the value of equity of the enterprise to be appraised through estimating the total discounted value of dividends of the enterprise to be appraised. The dividend discount method is usually applied when the dividend stream of the enterprise to be appraised can be forecasted.

2. Implementation principles

In the case where the enterprise to be appraised is a joint-stock company, the dividend discount method uses the assumption that the preferred shares of the enterprise to be appraised are treated as common shares. This assumption must be clearly stated in the limitations section of the appraisal certificate and the appraisal report.

3. Implementing the dividend discount method includes:

a) Forecasting the dividend stream of the enterprise to be appraised (D);

b) Estimating the cost of equity capital of the enterprise to be appraised (Re);

c) Estimating the end-of-period equity value of the forecast period (Vn);

d) Estimating the equity value of the enterprise to be appraised (V0).

Article 29. Forecasting the Dividend Stream of the Enterprise to be Appraised

1. Forecasting the dividend stream of the enterprise to be appraised includes forecasting the dividend payout ratio and the dividend growth rate of the enterprise to be appraised. The forecasted dividend stream takes into account income from cash and cash equivalents.

2. The basis for estimating the forecast period of the dividend stream is the characteristics of the enterprise, the industry it operates in, and the economic context to select appropriate growth models.

3. The minimum forecast period for the dividend stream is three years.

4. For newly established enterprises or those experiencing rapid growth, the forecast period for the dividend stream may extend until the enterprise enters a steady growth phase. For enterprises with a limited operating term, the forecast period for the dividend stream is determined based on the enterprise's lifespan.

Article 30. Estimating the Cost of Equity Capital of the Enterprise to be Appraised

The estimation of the cost of equity capital is carried out according to the guidance provided in Subpoint 6, Clause 7, Clause 8, and Clause 9 of Article 20 of this Standard.

Article 31. Estimating the End-of-Period Equity Value of the Forecast Period

1. Case 1: The dividend stream after the forecast period is a constant non-growing cash flow extending indefinitely. The formula for calculating the end-of-period forecast value is:

$V{n}=\frac{D{n+1}}{R_{e}}$

2. Case 2: The dividend stream after the forecast period is a steadily growing annual cash flow extending indefinitely. The formula for calculating the end-of-period forecast value is:

Where:

Dn+1: The dividend stream of the enterprise in year n+1

g: the growth rate of the dividend stream

The growth rate of the dividend stream is forecasted based on the retained earnings reinvestment rate and the return on equity.

3. Case 3: The enterprise ceases operations at the end of the forecast period, the end-of-period forecast value is determined based on the liquidation value of the enterprise to be appraised.

Article 32. Estimating the Equity Value of the Enterprise to be Appraised

1. Calculate the present value of the total dividend stream of the enterprise and the end-of-period equity value after discounting the dividend streams and the end-of-period equity value of the enterprise at the discount rate which is the cost of equity capital.

$V{0}=\sum{i=1}^{n}\frac{D{i}}{(1+R{e})^{i}}+\frac{V{n}}{(1+R{e})^{n}}$

2. Estimate the value of non-operating assets of the enterprise according to the guidelines for determining the value of tangible assets, intangible assets, and financial assets under this standard and related Vietnamese valuation standards.

3. Estimate the equity value of the enterprise to be appraised by adding the present value of the enterprise's dividend streams and the present value of the end-of-period equity value with the value of non-operating assets, then subtracting the value of liabilities without financing costs recorded on the financial statements related to the formation of non-operating assets at the time of appraisal (if any).

Article 33. Other cases

For contents not specifically provided for in this Standard, implement according to the provisions of the Vietnamese Valuation Standard on the Income Approach./.

MINISTRY OF FINANCE