New Accounting Rules Force HPG, VNM, HAG, DBC, BAF to Disclose Biological Assets

Overview

New accounting regulations in Vietnam, Circulars 99/2025 and 43/2026, took effect on January 1, 2026, requiring companies to separately report biological assets on their balance sheets. This change affects major listed firms including Hoa Phat Group (HPG), Vinamilk (VNM), Hoang Anh Gia Lai (HAG), Dabaco (DBC), and BAF Vietnam (BAF). The new line items provide greater transparency into agricultural holdings but also introduce mandatory impairment provisioning.

Key Facts

• Circular 99/2025/TT-BTC, effective January 1, 2026, adds Account 215 for separate accounting of biological assets, replacing previous rules under Circular 200/2014.
• Circular 43/2026/TT-BTC amends Circular 202/2014 to add line items 150 (short-term biological assets) and 230 (long-term biological assets) to the consolidated balance sheet format.
• HPG reports VND 440 billion in short-term biological assets (net of VND 5.6 billion provision) and VND 183 billion in long-term biological assets, totaling VND 623 billion, or 0.24% of total group assets.
• BAF records VND 1,433 billion in short-term biological assets (fattening pigs) and VND 695 billion in long-term biological assets (breeding pigs), totaling VND 2,128 billion, equivalent to 17.5% of total assets.
• HAG reports VND 622 billion in short-term biological assets, primarily seasonal crops (VND 566 billion) and livestock.
• Companies must establish impairment provisions (Account 2295) if net realizable value falls below cost.
• Biological assets are classified into three categories: single-harvest livestock, seasonal or single-harvest crops, and periodic-product livestock.

What Happened

In Q1 2026 consolidated financial statements, several Vietnamese companies began reporting a new line item: “Biological Assets” (short-term and long-term), previously not separately disclosed. This follows the issuance of Circular 99/2025/TT-BTC by the Ministry of Finance, effective January 1, 2026, which introduces Account 215 for biological asset accounting, and Circular 43/2026/TT-BTC, which amends the balance sheet format to include specific codes 150 and 230.

The regulations classify biological assets based on expected harvest time: assets with a harvest cycle of 12 months or less (or one business cycle) are short-term; those exceeding 12 months are long-term. Three core groups are defined: single-harvest livestock (e.g., slaughter pigs), seasonal or single-harvest crops, and periodic-product livestock (e.g., breeding pigs). Companies are required to assess impairment and record provisions if net realizable value is lower than cost.

Market Context

HPG closed at VND 28 on April 15, 2026, down 1.75% on volume of 27.5 million shares on HOSE. VNM closed at VND 61, down 1.13% on volume of 4.2 million shares. DBC closed at VND 23, up 0.87% on volume of 2.1 million shares. The new accounting rules do not change underlying cash flows but may affect reported earnings through impairment provisions and alter balance sheet composition. For HPG, biological assets represent a negligible 0.24% of total assets, but for BAF, the figure is 17.5%, making the rule more impactful for pure-play agricultural firms.

Strategic Significance

The mandatory separate disclosure of biological assets increases transparency for investors, allowing better assessment of agricultural exposure and risk management. For companies like BAF and HAG with significant biological asset bases, the requirement to regularly assess impairment could introduce earnings volatility. The rules align Vietnamese accounting closer to international standards (IAS 41), potentially improving foreign investor confidence. However, the transition may create comparability issues with prior periods where such assets were embedded in other line items.

What to Watch

• Q2 2026 financial statements for any impairment provisions booked against biological assets, especially if commodity prices decline.
• Foreign ownership limit changes or investor reactions as transparency improves.
• SBV or Ministry of Finance guidance on tax treatment of biological asset revaluations.
• Updates from HAG on its seasonal crop cycle and any provisioning needs.
• BAF’s ability to manage pig price volatility given its large biological asset base relative to total assets.