Get to know accounting in Thailand
There are 2 professional bodies that outline the standards expected with regards to accounting in Thailand. These 2 bodies are the Institute of Certified Accountants and the Auditors in Thailand. As you would expect their main roles are to improve Thailand’s accounting practices and ensure that all new rules are conveyed to, and understood by all of their members. It may seem obvious but the aim of this is to ensure continuity whilst at the same time making advances that keep Thailand in line with international standards and regulations. The main aim is to improve the credibility of Thailand on the world business stage.
In Thailand Auditing standards are set by The Board of Supervision of Auditing Practice which is part of the Ministry of Finance. It is the Board’s responsibility to grant auditing licenses. They have full control over the regulation of auditors in Thailand. In Thailand, all companies must be audited annually, regardless of size, if they are private or public companies, joint ventures or partnerships so there is an increasing need for qualified auditors and accountants. Accountants and Auditors need to be certified and registered with The Institute of Certified Accountants and Auditors and must meet the following criteria in order to qualify:
- The applicant must be a Thai national in order to practice in Thailand
- The applicant must hold a bachelor’s degree in accounting or a related field
- The applicant must have been practicing in the auditing profession for a minimum of two years
- The applicant must take and pass the written examination
After an accountant or auditor has passed the relevant exams it then becomes the individual’s responsibility to ensure that they act in accordance with generally accepted accounting practice. As a very rough overview this is based on the accruals method and historical costings. Like many countries, the main fundamentals of accounting include consistency, prudence, matching and going concern. In any situation where the accountant deviates from these basic concepts, a disclosure should be clearly referenced in the notes with a detailed explanation.
Below are some further brief details about accounting principles and practices in Thailand. Hopefully it will help you further understand all the aspects that go into your company’s accounts:
The Inventory – should be valued at the cost or market value, whichever is the lower of the 2
Fixed Assets – should be valued at cost less depreciation (accumulated). This is usually the straight line method although other methods can be used and again should be noted.
Land – This is not depreciated.
Tax – This should be expensed in the same year as the liability occurs
The information provided is correct at the time of writing but is subject to change. It is always advisable to speak to an expert to get correct, up to date advice prior to commencing your business.