Heat oven to 350°F.
Spread shredded coconut in a thin layer on a cookie sheet and bake 6-7 minutes, stirring frequently until light brown.
Mix water, cocoa, salt, sugar, and butter in a sauce pan. Stir over medium heat; let boil for 5 minutes.
Remove from heat, add vanilla. Allow to cool.
Roll scooped vanilla ice cream in toasted coconut (or sprinkle on top). Pour cooled chocolate sauce over ice cream.