Explainer: Why Vietnam's SJC valued 170,876 gemstones at just $0.23 each

The figure could cause unnecessary concern if the accounting term ‘off-balance-sheet’ is misunderstood, experts said.

According to its audited 2025 financial statements, SJC was tracking 170,876 colored gemstones, precious stones, and semi-precious stones in off-balance-sheet accounts, with a total book value of more than VND1 billion ($38,000).

Based on that book value, each stone was recorded at an average of around VND6,000 ($0.23).

However, the financial statements did not provide a detailed breakdown of the 170,876 stones or specify the proportions of colored, precious and semi-precious stones.

Therefore, their market value cannot be inferred from the accounting figures alone.

Financial expert Phan Le Thanh Long, founder of AFA Group and the Vietnam Wealth Advisors Community (VWA), offered a broader explanation of off-balance-sheet accounting without commenting specifically on SJC’s case.

He said off-balance-sheet items refer to a company’s or bank’s assets, debt obligations or financial commitments that have not been recognized directly on its balance sheet.

Many asset and liability items that do not meet the accounting definitions for recognition as assets or liabilities are recorded off the balance sheet.

In some cases, off-balance-sheet assets may be assigned a book value of zero.

A large uncut diamond may be purchased for VND10 billion ($380,000).

When the company processes it, the cutting process may produce 100 tiny diamond fragments.

“After processing, the large diamond may still carry a book value of VND10 billion, plus processing costs such as labor, tools, and supporting materials,” Long explained.

Meanwhile, the 100 diamond fragments, whose book value is not separately determined, may be tracked off the balance sheet at a book value of zero.

Nevertheless, they remain tangible items and may still have a certain market value.

“That is why companies must track such items off the balance sheet to monitor the physical inventory, prevent losses, and later recognize any proceeds if the items are sold or liquidated,” Long said.

“From that perspective, it is understandable that hundreds of thousands of precious and semi-precious stones could carry very low off-balance-sheet book values,” he added, noting that this was only one example of how off-balance-sheet accounting may work.

An executive at a gemstone company said stones that are misplaced, damaged or broken during processing are typically tracked off the balance sheet.

The actual value of a stone depends on several factors, including its type, size, color, clarity, craftsmanship and grading certification, the executive said.

Prices can range from tens of thousands of Vietnamese dong to millions or even hundreds of millions of dong per stone.