Forms of presentation of financial statements. Financial statements: types and composition
Accounting (financial) statements, goals and objectives
Concept, composition of financial statements and general requirements for it
Financial statements are one system data on the property and financial position of the organization and on the results of its economic activity... It is compiled in accordance with the established forms based on accounting data (Regulations on accounting"Financial statements of the organization" (PBU 4/99), approved by the Order of the Ministry of Finance of Russia dated 06.07.1999 N 43n, - as amended by from 18.09.2006 N 115n). These reports are used by external users to assess the performance of the organization, as well as to economic analysis within the organization itself. At the same time, it is necessary for the operational management of economic activity and serves as the starting point for subsequent planning. The reporting must be reliable and timely. It should ensure the comparability of reporting indicators with data for previous periods.
Modern accounting (financial) reporting should be distinguished by the transparency and interpretability of information about equity capital, which, in our opinion, is provided by the article-by-article decoding of the main components: authorized capital, share premium, Reserve capital, undistributed (reinvested) profit. Differentiated information on the actual paid-in capital allows founders to calculate the price of equity capital, assess the measure of financial risks and financial leverage. An additional increase in indicators is required not only by the balance sheet, profit and loss statement, but also by the statement of changes in equity (for example, dividends on ordinary and preferred shares accrued). Additional information about the owner's capital is supposed to be provided in accordance with the requirements of the IFRS. In terms of disclosing the organization's liabilities, it is necessary to group capital financed by third parties in the form of external sources. The allocation of items of debt financing will allow not only to more clearly distinguish between equity and borrowed capital, but also to reveal the mechanism for servicing debt obligations, to control the timeliness, completeness and payment of the provided financial resources. A fundamentally important point in structuring liabilities is their differentiation into short-term and long-term; consolidation of capital providers within the framework of current obligations into four groups - commercial partners, government bodies, personnel and settlements with founders; the participation of investors is supposed to be reflected in the context of the forms of financing of the organization. The presented approach to disclosing liabilities in the balance sheet under the minimum program, but taking into account additional indicators (for example, in explanatory note) will allow, in our opinion, to assess the scale of debt financing, the optimality of its sources, the price of debt capital and other important financial characteristics... The information disclosed in the accounting (financial) statements should be simple enough for interpretation. This goal cannot be achieved without reforming the accounting and reporting system in accordance with IFRS. According to the Regulation on accounting “Accounting reporting of an organization” (PBU 4/99), approved by Order of the Ministry of Finance of the Russian Federation No. 43n dated July 6, 1999, “financial statements are a unified system of data on the property and financial position of an organization and economic activity, compiled on the basis of accounting data in accordance with established forms. "
Financial statements are a unified system of data on assets, capital, liabilities and financial results of an organization's economic activities, formed on the basis of accounting data in accordance with approved forms. Financial statements serve as a tool for planning and monitoring the achievement of economic goals of an economic entity, the main among which is making a profit, as well as maintaining and increasing capital. Profit and capital, their value and change are reflected in accounting statements... Based on their data, you can:
Assess the financial position of potential partners;
Decide on the feasibility and conditions of doing business with a partner;
Avoid issuing loans to unreliable clients;
Assess the feasibility of acquiring assets (for example, securities) of a particular organization;
Diagnose bankruptcy, etc.
According to the frequency of preparation, they are distinguished: interim financial statements and annual statements.
The structure of the annual financial statements includes the following forms: - balance sheet (form No. 1);
- - profit and loss statement (form N 2);
- - explanations to the balance sheet and profit and loss statement, which are:
statement of changes in equity (form N 3);
cash flow statement (form N 4);
annex to the balance sheet (form No. 5);
explanatory note.
The final part audit report issued based on the results of the statutory audit of financial statements.
Accounting (financial) statements in accordance with the regulatory requirements for accounting and reporting are prepared monthly and submitted in accordance with the established procedure on a quarterly or annually to the relevant addresses (founders, statistical and tax authorities). According to the results of the quarter, two main forms of reporting are drawn up - the balance sheet (form No. 1) and the profit and loss statement (form No. 2), according to the results of the year, reports are drawn up in all forms, including the report on changes in capital (form No. 3) and the report on cash flow (form No. 4). An appendix to the balance sheet, consisting of references that explain the main articles of forms No. 1 and 2, are compiled by organizations at their own discretion. In addition, the reporting includes special forms on the use of budgetary funds and forms provided for specific sectors of the national economy ( railway transport, connection). The quality of the explanatory note and the availability of an auditor's report (if the organization is the subject of a statutory audit) are of great importance for ensuring the proper information content of the reports. The content of the explanatory note is not regulated by regulations. It is determined by the peculiarity of economic activity, its changes during the reporting period, the development of new types of production, entering new sales markets, etc. Considering the content of the reporting, first of all, it is necessary to determine the completeness and accuracy of its preparation. This is ensured by its formal, arithmetic and logical control. First of all, it is necessary in the reporting forms to highlight those articles that are the most significant, that is, they occupy the largest share in the final indicators, and to identify the need for their detailing. In addition, it is prudent to determine whether the entity is legitimate in not completing certain typical reporting lines. For example, the balance sheet may not highlight the profitable use of property, but form No. 2 shows significant income from the lease of property or at the enterprise where the production process is taking place; the balance does not reflect "Fixed assets" and there is no data on the off-balance sheet accounting of fixed assets, ie, leased. 25The second stage of verification is arithmetic, that is, control over the correctness of detail and aggregation of indicators, as well as over the accuracy of filling in all reporting forms (identical data in all forms, etc.). A special place in understanding the content of the statements is occupied by its interpretation depending on the adopted accounting policy, in particular on the accepted forms of property valuation and write-off, the fact of property registration (for example, when leasing operations- after full payment or after commissioning) and recognition of income and expenses. The third stage is related to the logical check. At this stage, the analyst, taking into account the prevailing economic situation finds out how much you can trust the data of internal and external information about the quality of the manufactured (sold) products (or services), about the income and expenses of the analyzed economic entity, the assessment of the qualifications and conscientiousness of its managers and personnel, the state of accounting and control. In particular, at this stage it is necessary to familiarize yourself with the collation statements of the inventory of fixed and current assets. In practice, the absence of discrepancies between the actual availability of inventories and the corresponding accounting data for their various types is impossible due to natural loss, just as the complete coincidence of their write-offs almost rarely coincides with the rates of natural loss. The absence of such a discrepancy is a signal of a fictitious or low-quality inventory. Another signal causing distrust of inside information is a sharp deviation of the profitability of individual operations from its average industry level. The absence of comments from internal control regarding the storage of property, as well as regarding the execution of transactions related to the main and non-core activities, should cause concern. In the process of logically checking the collected information, other inconsistencies can be found, for example, in relation to the level certain types production and distribution costs that undermine confidence in information. At the stage of logical verification, the analyst's conclusions are mainly preliminary in nature and entirely depend on his qualifications and experience in practical audit or audit activities. The method of logical verification is very subjective and almost defies formalization. 26The final stage of checking the accounts should be the adjustment of the property value, balance sheet profit and equity capital. The introduction of such adjustments is objectively necessary even with the strictest observance of the established legislative and regulations the order of accounting and reporting, as well as the formation of external information.
The Federal Law of November 21, 1996 No. 129-FZ "On Accounting" states that the main objectives of accounting are:
- * formation of complete and reliable information about the activities of the organization and its property status;
- * provision of information necessary for internal and external users of financial statements to monitor compliance with legislation, business transactions and their feasibility, the presence and movement of property and obligations, the use of material, labor and financial resources in accordance with the approved norms, standards and estimates;
- * prevention of negative results of economic activity of the organization and identification of intra-firm reserves to ensure its financial stability. Presentation of information is essential to ensure stability market relations... Therefore, in legislative acts accounting specialists place great emphasis on the quality of this information.
In turn, with an increase in the level of requirements for the quality of information on the part of market participants and regulatory bodies, business entities are also interested in improving internal information systems, which will allow them to gain a reputation for providing quality information. Material data on the main elements of the reporting of any commercial organization (about assets, liabilities, capital, income, expenses and profits) in balance sheet in the format financial statements, it is proposed to characterize in the amount of minimum requirements prescribed by legislative and regulatory acts, as well as in the form additional information, which leads the management of the organization on a proactive basis. In particular, the option of the minimum required data means the disclosure of information about assets that support operating, financial and investment activities.
The expediency of reflecting such information in the balance sheet is dictated by the need to control compliance with parity in the level of return on assets, the importance of monitoring the risk of capital return, comparative characteristics the profitability of the organization's business with the profitability of organizations included in the nearest economic space (immediate market environment). Under quality characteristics financial reporting international standards imply attributes that make information useful to users. These include relevance (the ability to use information to make proactive decisions) and reliability. The following factors influence the relevance of reporting: timeliness, relevance, predictive value, and feedback.
Timeliness - access to information when the user's need arises. As evidenced by foreign practice, the reporting period should not exceed 6 months from the date of its preparation, otherwise the meaning of using the information is lost. In Russia, the same deadline for the publication of reports has been adopted.
Significance - all data that can have a significant impact on decision-making by information users should be reflected in the reporting. The predictive value of information lies in the ability to determine the viability of an organization over the long term.
The composition of the financial statements is determined by the Federal Law "On Accounting" and clause 5 of PBU 4/99. a specific list of form, terms and addresses of submission depend on the duration of the periods covered by the reporting.
The composition of the interim reporting is defined in section 9 "Interim accounting reporting" PBU 4/99, and includes: Balance sheet, form No. 1 and Profit and loss statement, form No. 2.
The annual financial statements of organizations, with the exception of the statements of budgetary organizations, consists of the following forms:
Balance sheet, form No. 1;
Profit and loss statement, form No. 2;
Statement of changes in equity, form No. 3;
Cash flow statement, form No. 4;
Appendix to the balance sheet, form No. 5;
Explanatory note.
An auditor's report confirming the accuracy of the organization's financial statements, if it is subject to mandatory audit in accordance with federal laws;
The composition of the financial statements of budgetary organizations is determined by the Ministry of Finance of the Russian Federation.
So, small businesses that are not obliged to conduct an audit can make a decision, fixing it in the accounting policy, on the presentation of financial statements in the amount of indicators for groups of balance sheet items and profit and loss statement items without additional decryptions in forms No. 1 and No. 2 They have the right not to submit Forms 3 - 5 and an explanatory note. In cases where an audit is mandatory, they may not include forms No. 3 - 5 in the financial statements, if they do not reflect the relevant data.
If an organization has subsidiaries and affiliates, then, in addition to its own financial statements, it is obliged to draw up consolidated financial statements, including the indicators of reports of such companies located both in the territory of the Russian Federation and abroad.
Forms of financial statements of organizations, as well as instructions on how to fill them out, are approved by the Ministry of Finance Russian Federation... The forms proposed by the Ministry of Finance of Russia are recommended, approximate, and on their basis each organization can develop its own reporting forms or fixes in its accounting policy a provision that uses the forms recommended by the Ministry of Finance of Russia. If, when filling out the reporting forms, the organization does not have numerical indicators for any article, then it can be excluded from the forms. At the same time, it is not prohibited for an organization to provide transcripts directly in the balance sheet for clarity of presenting the necessary information to interested users.
However, the Ministry of Finance of Russia has established mandatory details that must be present in all forms of financial statements submitted by the organization to the appropriate addresses, namely:
the name of the constituent part of the accounting statements;
indication reporting date, as of which the financial statements were drawn up, or the reporting period for which the financial statements were drawn up;
the full name of the legal entity in accordance with the constituent documents registered in accordance with the established procedure;
taxpayer identification number - TIN assigned by the tax authority in the prescribed manner;
the type of activity that is recognized as the main one in accordance with the requirements normative documents approved by the State Statistics Committee of the Russian Federation;
organizational and legal form of the organization in accordance with the Classifier of organizational and legal forms of economic entities and the form of ownership in accordance with the Classifier of forms of ownership;
unit of measurement: thousand rubles. or million rubles;
location;
the date of approval is indicated for the annual financial statements;
date of dispatch / acceptance of reports.
The organization submits without fail financial statements:
founders, participants and owners of its property;
territorial bodies of state statistics at the place of its registration;
tax authorities at the place of registration;
other executive authorities, banks or other users in accordance with the legislation of the Russian Federation.
Organizations, with the exception of budgetary organizations, are required to submit quarterly financial statements within 30 days after the end of the quarter, and annual ones - within 90 days after the end of the year, unless otherwise provided by the legislation of the Russian Federation.
According to paragraph 5 of Art. 15 of Law No. 129-FZ, an organization can submit financial statements directly or through a representative, by mail or send in electronic form.
The date of submission by the organization of financial statements is the date of its mailing or the date of the actual transfer of ownership.
Failure to submit declarations, documents or other information necessary for control, as well as information in incomplete or distorted form, within the time limits established by the legislation, entails the imposition of administrative fine and tax sanctions on a taxpayer and (or) an official (manager, chief accountant) in the amount established by Ch1 of the Tax Code of the Russian Federation, the Code of Administrative Offenses of the Russian Federation.
Classification of accounting (financial) statements
Accounting (financial) statements are classified:
1.by types
2.by the frequency of compilation
3. according to the degree of generalization of the reported data
4. by the amount of information included in the reporting
By type, reporting is subdivided into:
a) accounting - contains information about the property, liabilities and financial results of the organization in terms of value.
b) statistical - compiled on the basis of accounting data, it reflects individual indicators of the economic activity of the enterprise, both in value and in kind.
c) operational - compiled on the basis of operational accounting data, it reflects data for short periods of time (day, decade, etc.).
These indicators are used for operational control and enterprise management.
According to the frequency of preparation, the reporting is subdivided into:
a) intra-annual (interim) - this is reporting for the day, decade, month, quarter, half year. These are the periodic accounting records of the organization.
b) annual - this is the reporting of the organization for the year, compiled as of January 1 of the year following the reporting one.
According to the degree of generalization of the reporting data, the reporting is divided into:
a) primary - is an organization, as an independent economic entity
b) consolidated - is compiled by a superior (parent) organization on the basis of primary reports of dependent organizations
According to the volume of information, the reporting is subdivided into:
a) internal - characteristic of the activities of a separate section of the organization, compiled for use within the organization
b) external - typical for the organization as a whole, compiled for external users
Qualitative characteristics of financial statements. Submission timeline
The purpose of financial statements is to provide information on the financial position (balance sheet), financial results (income statement) and changes in financial position (cash flow statement) of an economic entity. At the same time, such a concept as transparency of reporting, which means the availability and clarity of information about the organization, is of particular importance.
Relevance and reliability (reliability) are also important qualitative features of reporting information.
Relevance and reliability are the parameters that make the reported information useful in decision-making and, in essence, as it presents an objective and truthful picture. Reported information is considered relevant if it is capable of influencing the valuation or decision currently being made. The relevance of information, in turn, is characterized by timeliness, relevance and value for predicting and verifying results.
The relevance of the reported data materially affects the measurement or management decision... Compiled by accounting reports must decide which of the many data available to it can satisfy the requirements of different users. The significance of this or that element of information is determined not only by its value in quantitative terms, but also by the role that that element can play. An item of information is significant if its exclusion influences the decisions made by the user based on the accounting reports.
Reliability is another important sign of the quality of accounting information, guaranteeing its users not only an objective description, an acceptable reflection of the events that it should represent, but also the absence of significant errors and deviations. The accuracy (reliability) of the information provided in accounting reports, are influenced by the following factors
The truthfulness of the data presented;
The prevalence of content over form. Sometimes transactions and events presented in accounting (financial) statements are subject to different interpretations. They can be viewed from the point of view of the legal form or from the economic point of view. Organizations in their reports (explanatory note) should highlight the economic content of transactions and events, even if the legal form differs from the economic content and involves a different assessment of the event;
Neutrality. The information should be objective in relation to different users.
Discretion. When assessing the reliability of the information presented in the financial statements, it is necessary to take into account the factors of uncertainty. Although the reports are based on events in the past, the meaning of many of them is revealed only when they are considered in terms of consequences for the future (for example, the size of doubtful debts). At the time of reporting, these impacts cannot be accurately determined. Therefore, preparers of financial statements should exercise caution in assessing these consequences;
Verification capability. Data on a transaction or event contained in the accounting reports can be carried out if the independent auditors agree that they correspond with a reasonable degree of accuracy to the main transactions or events;
Comparability. Compilation of accounting (financial) reports in a comparable form makes it possible to study the commercial activities of different organizations or the same organization for a certain period.
The procedure and terms for submitting financial statements - these points are regulated by Article 15 of the Law "On Accounting".
So, according to this article, all organizations, with the exception of budgetary ones, submit annual financial statements in accordance with the constituent documents to the founders, members of the organization or the owners of its property, as well as territorial bodies state statistics at the place of their registration. State and municipal unitary enterprises submit financial statements to the bodies authorized to manage state property... Accounting statements are submitted to other executive authorities, banks and other users in accordance with the legislation of the Russian Federation.
At the same time, when conducting accounting, it is important to know that organizations, with the exception of budgetary and public organizations(associations) and their structural divisions that do not carry out entrepreneurial activity and who, apart from the retired property, have no turnovers for the sale of goods (works, services), are obliged to submit quarterly financial statements within 30 days after the end of the quarter, and annual - within 90 days after the end of the year, unless otherwise provided by the legislation of the Russian Federation.
The submitted annual financial statements must be approved in accordance with the procedure established by the constituent documents of the organization.
Budget organizations submit monthly, quarterly and annual financial statements higher authority within the time frame set by him.
Public organizations (associations) and their structural units that do not carry out entrepreneurial activities and do not have, apart from the retired property, turnovers for the sale of goods (works, services), submit financial statements only once a year based on the results of the reporting year in a simplified composition:
· balance sheet;
· Profits and Losses Report;
· Report on the targeted use of the funds received.
The financial statements can be presented to the user by the organization directly or transmitted through its representative, sent in the form of mailing with a list of attachments or transmitted via telecommunication channels.
The user of the financial statements does not have the right to refuse to accept the financial statements and is obliged, at the request of the organization, to put a mark on the copy of the financial statements on the acceptance and the date of its submission. Upon receipt of financial statements via telecommunication channels, the user of the financial statements is obliged to transfer the receipt of acceptance in electronic form to the organization.
The date of sending the postal item with an inventory of the attachment or the date of sending it via telecommunication channels or the date of the actual transfer of belonging is considered the day of submission by the organization of accounting reports.
Organizations prepare monthly, quarterly and annual financial statements. In this case, the first and second financial statements are interim.
The reporting year for all organizations covers the period from January 1 to December 31 of the calendar year inclusive.
The legislation also sets the deadlines for submitting financial statements: quarterly - within 30 days after the end of the quarter, and annual - within 90 days after the end of the year.
Terms of delivery of financial statements:
· annual reporting- within 90 days after the end of the year (then
Quarterly (interim) reporting - within 30 days
Annual financial statements are submitted to the tax authorities after their approval by the competent body of the legal entity, determined by the constituent documents of the organization. In LLC, such a body is the General Meeting of Participants, in CJSC, OJSC - general meeting shareholders.
Lack of financial and economic activity, movement on bank accounts is not a reason for not submitting financial statements.
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International Financial Reporting Standard "First-time Adoption (IFRS 1)" (IFRS-1) discloses the structure and content of each of the reporting forms.
The purpose of this standard is to disclose the main requirements for the content of financial statements. These requirements are primarily aimed at ensuring the comparability of the information contained in the financial statements.
Financial statements are a structured presentation of data about the business and financial position of a company. The main objective of reporting is to meet the needs of a wide range of users in financial information necessary for the adoption economic solutions... To accomplish this task, the financial statements must include data on assets, liabilities, equity, income and expenses (including profit and loss), movement. These materials, contained in the annexes to financial statements help users predict an enterprise's ability to accumulate economic benefits.
Financial reporting requirements and conditions
Financial statements must fairly reflect the financial position, financial results for reporting period and the cash flow of the reporting company. Its reliability is ensured by the rigorous application of all provisions of IFRS, the correct choice and application of accounting policies that allow the presentation of relevant, reliable, comparable and understandable information, which, together with the correct additional disclosures in the explanatory notes, allows users to understand the essence of the company's transactions, events that occurred in the course of its activities, and their impact on the financial results and financial position of the company.
As you know, the essence of the accrual method is that business transactions and the events that have taken place are reflected in the financial statements in the reporting period in which they actually occurred, regardless of the payment or receipt of funds in payment for these transactions and events.
Expenses are recognized when the related income is incurred and recognized. In the absence of income, the expenses incurred are reflected in the budgetary and regulatory items as deferred expenses or carry over to the next period expenses for work in progress or creation of inventories. This is how the principle of correlating expenses to income works.
The standard says that “each material item should be presented separately in the financial statements. Insignificant amounts should be combined with amounts of a similar nature or purpose and should not be presented separately. ” When drawing up reports, one should proceed from the fact that the reporting should not be littered with insignificant items, thereby making it difficult for its perception and understanding by users.
How to separate essential information from non-essential information? There are no exact quantitative criteria, although some provisions state that items exceeding the total for this report should be considered material. In a qualitative sense, information is considered material if its absence or insufficient disclosure could influence the decisions that users make on the basis of the financial statements.
Items of assets and liabilities, income and expenses are not subject to offset and are reflected in the financial statements as separate items when they are material.
Offsetting is possible only when:
IFRS requires or permits offset;
items of assets, liabilities, profits, losses, related expenses are defined as immaterial.
It is important to understand that offsetting items in the financial statements reduces users' understanding of the entity's transactions; reduce their ability to predict future, performance and financial condition organizations.
The standard contains some hints and clarifications that limit the application of the guidance of the standard regarding the offset of individual items. Balance sheet items are recorded at net value. The notes to the statements should disclose the amounts of accrued reserves and not offset the balance sheet items presented in it for residual value.
Reporting period and deadlines for submission. The reporting period for financial statements is a calendar year. The beginning of the reporting period can be determined from the 1st day of any month of the year. Intra-annual reporting by quarters or months is considered interim and is presented to users at the decision of the organization's management.
An important condition The usefulness of information is the timeliness of presentation of financial statements to users. The standard sets the deadline for reporting and reporting in accordance with the laws or customs of business in the markets of individual countries.
Each report included in the financial statements must have a title that distinguishes it from other forms of reporting.
In addition, the financial statements - and if necessary, each individual report - include an overall background information characterizing:
Name and brand name of the organization;
an indication of the coverage of the reporting of only one organization or several organizations belonging to consolidated group;
information about the reporting date as of which it was drawn up, about the reporting period based on the results of operations of which other financial statements were drawn up;
reporting currency, indicating its unit of measurement, used for the preparation of financial statements (be sure to inform users of the level of accuracy used when presenting digital data in the reporting).
A complete set of financial statements includes:
Balance sheet;
Profits and Losses Report;
capital flow report;
cash flow statement;
accounting policies and explanatory material.
The balance sheet should include such indicators as, cash and cash equivalents, inventory, accounts receivable and, investments, tax liabilities, capital and reserves. Additional materials disclosing the content of the listed articles are given in the balance sheet or in the appendices to the financial statements in accordance with the requirements of IFRS.
The main idea of drawing up the balance sheet, as you know, is to disclose the company's funds and their sources in the context of the main items of assets and liabilities, as well as in comparing the data for the reporting period with the data for the previous period.
The income statement must include the following information: financial result from operating activities, expenses, part of income and expenses of associates and joint ventures, tax expenses, profit or loss from operating activities, incidental income and expenses, minority interest (for consolidating companies) and profit or loss for the reporting period. Additional information disclosing the content of the listed items is provided in the balance sheet or in the appendices to the financial statements in accordance with the requirements of IFRS.
In its interpretation until October 2004, IFRS -1 had such concepts as: profit on ordinary activities,. Currently, the word “clean” has been removed from IFRS-1. Apparently, this is a transitional moment to the concept of "full income" (in 2005 the IASB plans to issue a discussion paper "Full income").
For the income statement, IFRS -1 provides two alternative forms, one of which classifies expenses according to their origin, the other according to their function.
The classification of expenses by origin means that items such as, etc., reflected in the income statement, are simply the sums of homogeneous expenses. The classification of expenses by function implies their analysis according to three main items: cost of sales, selling and administrative expenses. This approach is considered the most common.
The main idea of the income statement is to adjust the amount received in the reporting period by adding the amount of expenses received and subtracting the expenses incurred, which ultimately gives the amount of profit for the reporting period.
The statement of capital flows is also an integral part of the financial statements. The presentation form of this report contains separate information on each element and reserves and lines with a list of their possible changes. On a separate line shows data on net profit for the reporting period, which is part of equity capital and forms the final data on the capital of the company.
The main idea of the statement of capital movements is to consistently adjust the capital balance for the previous reporting period by subtracting the accrued and the result of the revaluation of investments and adding the result of the revaluation of fixed assets, net profit for the reporting period and additional, which ultimately gives the amount of the company's capital at the end of the reporting period.
Accounting policy and the explanatory material reflect the main financial reporting methodological principles adopted by the organization.
The standard provides a list of essential information that must be included in the balance sheet and the income statement.
The requirements of international financial reporting standards have become the basis for the development of a national standard - the Regulation on accounting for the "organization" (PBU 4/99), approved by order of the Ministry of Finance of the Russian Federation No. 43n.
PBU 4/99 defines the composition, content and methodological basis for the formation of financial statements of organizations that are, by law, of the Russian Federation legal entities(except for credit and budgetary organizations).
The financial statements should give a reliable and complete picture of the financial position of the organization, and in case of insufficient data, additional indicators and explanations can be used, which complies with the requirements of IFRS.
In accordance with PBU 4/99, the balance sheet must characterize the financial position of the organization as of the reporting date, i.e. the last calendar day of the reporting period.
As in world practice, in the balance sheet assets and liabilities are presented - depending on the maturity (maturity) - as short-term and long-term.
In terms of form, the balance sheet contains the names of sections, groups of articles and individual items for assets and liabilities.
The developed form of the balance sheet of organizations, of course, is a reflection of new approaches to the formation of balance sheet indicators, taking into account the transition to a new accounting methodology, laid down in.
The balance sheet is compiled in rubles (thousand rubles, million rubles), in net valuation, that is, minus the regulatory values that are disclosed in the notes to the balance sheet (for example, depreciation of fixed assets, intangible assets, uncovered loss etc.).
The result of the structuring of the items was a more accurate construction of the balance sheet sections in line with IFRS recommendations. The conceptual apparatus has been clarified: for example, long-term and short-term liabilities are shown in liabilities, which more accurately reflects the essence of debt to banks, legal and individuals.
At the same time, the structuring of sections and the consolidation of articles based on PBU 4/99 necessitates an increase in the amount of information disclosed in the explanations and additions to the statements.
The notes to the balance sheet and income statement are linked to disclosures.
They must disclose the following additional details:
On the availability at the beginning and end of the reporting period and on the movement during this period of certain types of fixed assets, including leased and intangible assets;
on the presence and movement of fixed assets transferred to this category from the inventory and accessories and vice versa;
about the presence and movement of certain species;
on the presence and movement of certain types of accounts receivable and accounts payable, including advances received and issued;
on the state and changes in the capital of the organization;
on the presence and movement of shares issued joint stock company;
on the availability and movement of reserves forthcoming expenses and reserves for doubtful debts;
on products (works, services) by type of activity and geographic sales markets;
on the composition of production costs ();
about the composition non-operating income and costs;
on extraordinary facts of economic activity and their consequences;
about events after the reporting date and conditional facts of economic activity;
about terminated operations;
about affiliated persons, i.e. persons owning more than the capital of the company (founders, shareholders, managers of the company, etc.);
on earnings per share.
Additions to the balance sheet appear in the form of separate reporting forms (for example,; statement of cash flows; report on the intended use of funds received) and in the form. At the same time, the explanations to the balance sheet should disclose the main types of activities, the average annual number of employees for the reporting period, as well as the composition of the members of the executive and control bodies of the organization.
Calculations, certificates, declarations are also attached to the balance sheet - in particular, on, on, on, on excisable goods and etc.
Thus, the balance sheet is a form of reporting open to users, which provides an opportunity to familiarize themselves with the financial position of the organization, including the performance indicators of its branches, representative offices and other divisions, including those allocated to separate balance sheets. The balance based on the results of work for the reporting period is presented to each founder in deadlines.
The balance sheet is signed by the head and chief accountant of the organization.
The main provision of IFRS - 1 is the requirement of full retrospective application of all IFRS effective at the reporting date when preparing the first financial statements. There are six possible exceptions to this requirement to simplify retrospective application in cases where the effect on the preparation of reports may exceed the effect for its users. Companies will be required to comply with both the retrospective application rule and the exemptions from it. This guide is intended to help you with this.
The transition to IFRS is associated with certain difficulties. Companies will have to change their existing accounting policies to meet the rather complex requirements related to pensions, deferred taxes, reserves and shares. Some companies may need to collect additional information in order to comply with the increasingly stringent disclosure requirements of IFRS.
When to start applying IFRS 1. Any company that first compiles financial statements in accordance with IFRS for a period beginning January 1, 2004, or for any subsequent periods, must adopt IFRS 1. Early adoption is encouraged - the company may for the first time prepare financial statements in accordance with IFRS already in 2003.
The first financial statements prepared in accordance with IFRS are understood to be the first, which “clearly and certainly complies with the requirements of IFRS”.
Opening balance sheet prepared in accordance with IFRS. First-time adopters prepare an opening balance sheet in accordance with IFRS as of the date of transition to IFRS, that is, the end date of the earliest period for which full comparative information is prepared in accordance with IFRS.
Many companies will present such information under IFRS 1 as of January 1, 2004. Their financial statements must include comparative information for at least one full financial year. The publication of the opening balance sheet is not required.
In the opening IFRS balance sheet:
All assets and liabilities that must be reflected in accordance with IFRS are reflected;
assets and liabilities prohibited for recognition under IFRS are not reflected;
all items of assets, liabilities and equity are classified in accordance with IFRS;
all balance sheet items are measured in accordance with IFRS.
Adjustments to financial statements arising from the first application of IFRSs are reflected in or under another line item in equity.
Accounting policy. The first IFRS financial statements are prepared on the basis of accounting policies that meet the requirements of IFRS in effect at the end of the reporting period. Therefore, many companies will have to develop accounting policies that are in line with IFRS as of December 31, 2005. This policy is applied retrospectively when preparing the opening balance sheet in accordance with IFRS and presenting information for all other periods covered by the first IFRS financial statements.
IFRS transitional provisions and guidance on changing accounting policies should be applied by companies already reporting in accordance with IFRS. They are not applicable to companies preparing for the first time IFRS reporting.
IFRS 1 clarifies the accounting policies used in preparing the first financial statements in accordance with IFRS. Planning for the transition to IFRS may be complicated by the development of new and revisions of existing IFRSs that have not yet been published but will enter into force in 2005. This refers to the revision of the rules for the recognition of financial instruments, new standards related to share-based payments, and business combinations.
Business combination
A recalculation of data relating to a business combination recognized prior to the date of transition to the new reporting standards is not required. However, the company may, at its discretion, revalue the previous business combination. In this case, the subsequent business combination would also need to be revalued. This exception is difficult to enforce, so you should carefully study the relevant guidance. Even if the company resorts to this exception, it may need to make some adjustments to the reporting.
Thus, when reporting a business combination:
The classification of a business combination as an acquisition or a combination of interests remains unchanged;
the acquired assets and liabilities are recognized in the opening balance sheet of the acquiring company, unless their recognition is completed by IFRS;
initial cost assets and liabilities acquired through a business combination is their pre-acquisition;
assets and liabilities that are subsequently measured in accordance with the requirements of IFRS at fair value are remeasured and shown in this measurement in the opening balance sheet.
Assets and liabilities that were not recognized after the business combination are recognized in the opening IFRS balance sheet only if they were to be recognized in the acquired company’s IFRS balance sheet. The amount of goodwill (goodwill of the firm) is adjusted only in special cases and is tested for collateral at the date of transition to new standards. Goodwill written off directly to equity is not reversed on transition to IFRS.
The accounts of all subsidiaries must be consolidated in the opening IFRS balance sheet. At the same time, the subsidiaries apply the new standards at the same time as the parent.
Fair value as initial measurement
Fair value can be the cost of any item of property, plant and equipment. A similar rule may apply to real estate investments when an entity decides to move from fair value to original estimates, as well as intangible assets that must be remeasured in accordance with IAS 38.
Employee benefits
Under IAS 19, companies can choose an accounting policy for recognizing actual reserves in the income statement over a specified period. First-time adopters of IFRS may recognize all actuarial gains and losses in the opening IFRS balance sheet and not charge them to profit or loss. This rule should be applied consistently to all retirement plans.
Differences in translation of foreign exchange rates of foreign subsidiaries
At the first compilation of the IFRS balance sheet, currency translation differences arising from the preparation of the consolidated financial statements of subsidiaries foreign companies, are not determined.
Compound financial instruments
On extinguishing the liability portion of a compound financial instrument, the amount initially recognized in the debt instrument is shown under equity. This element of equity need not be disclosed if the mandatory part of the compound financial instrument is extinguished at the date of transition to IFRSs.
Assets and liabilities of subsidiaries
If a subsidiary moves to IFRS reporting later than the parent, it can measure its assets and liabilities either at the carrying amounts reported in the parent's consolidated statements or by applying IFRS 1 at the date of transition. In the consolidated statements of the parent company, the corresponding items should be adjusted.
If a parent starts to apply IFRS later than its subsidiary, it must use the carrying amount of the assets and liabilities of the subsidiary.
Derecognition
IAS 39 is applied retrospectively upon derecognition of financial assets and liabilities. Financial assets and liabilities disposed of before 1 January 2001 are not recognized in the opening IFRS balance sheet. Derivatives and interest accrued on the derecognition of financial assets are recognized in the financial statements and all specialized companies are consolidated in the company's first IFRS financial statements.
Hedge accounting
Hedges are not accounted for in the opening balance sheet or in the first-time IFRS financial statements, unless the criteria for hedge accounting in IAS 39 are met. necessary documents
Calculated values
Estimated values as of the date of transition to IFRS, made in accordance with previously applied national standards, are included in the opening balance sheet compiled in accordance with IFRS, unless there is objective information about their error. If necessary, the calculated data can be revised. However, they should reflect conditions that existed at the date of transition to IFRS. Estimated values that were not reflected in the financial statements in accordance with the previously applied national standards should be shown in the financial statements under IFRS.
The disclosures include an explanation of the differences between the values of the following indicators, calculated under previous national standards and IFRS:
Equity at the date of transition and at the end of the last reporting period for which was presented in accordance with national standards;
net income for the last reporting period, the reporting for which was prepared in accordance with national standards.
These disclosures allow users to analyze the differences in indicators calculated according to national standards and IFRS, and get enough information to understand what significant adjustments need to be made to the balance sheet and income statement. If impairment losses are recognized in the opening IFRS balance sheet, they must be disclosed in accordance with and in IAS - 36. If fair value is taken as an initial measurement, items so measured are disaggregated by item.
The interim financial statements shall disclose the same information on equity and net income as in the annual financial statements for the comparable interim period and at its end.
Interim financial reporting
Interim financial statements in accordance with IAS 34 contain a set of financial statements for a period shorter than the full reporting year of the organization. Interim reporting may consist of abbreviated forms of financial statements, although it is not prohibited to draw up it in full, as provided for by international financial reporting standards.
Everyone considering the interim financial statements had at their disposal the annual financial statements for the previous year, therefore the notes to the annual financial statements are not repeated or updated in the interim statements. The latter should contain notes on those events and changes that have occurred since the reporting date of the last annual report and disclose the results of the company's activities in the new reporting year.
The standard does not insist on compulsory drawing up interim financial statements, but encourages those companies whose securities are freely traded on the stock market to prepare them. The standard recommends that such reports be prepared no later than 60 days after the end of the interim reporting year. It is specially emphasized that the reporting of such companies should be prepared in accordance with the requirements of IFRS - 34.
The composition of the interim financial statements may be smaller than the annual statements.
The condensed reporting format assumes that the report includes each of the headings and interim items that were included in the most recent annual financial statements. Additional articles are introduced in cases where their absence may lead to misconceptions in the assessment financial situation and the financial results of the company.
If the last annual financial statements were presented as consolidated (consolidated) statements, then the interim financial statements are presented in a consolidated version.
Since the statement of changes in equity can be presented in two forms, the interim reporting should use the same format as in the last annual financial statements.
Basic and diluted earnings per share are required to be disclosed in interim financial statements.
Selected explanatory notes should not repeat the notes that appear in the annual financial statements. The information in the notes should be presented as a characteristic of the entire reporting year, but it is also necessary to disclose events and transactions that are relevant to an understanding of the reporting for this interim period.
For the interim financial statements, presented in a complete set provided for by IFRS-1 and IFRS-7, it is necessary to show all disclosures and explanations in full, provided for by all international financial reporting standards. The fact that interim financial statements are prepared in accordance with IAS 34 should be specifically disclosed in the notes.
The frequency of interim financial statements can be semi-annual or quarterly. The balance sheet is presented at the end of the current interim period and the comparative balance sheet at the end of the previous reporting year.
Profit and loss statements are presented for the current interim period and on an accrual basis from the beginning of the year; comparative reporting indicators - for the comparable interim period of the previous year and on an accrual basis from the beginning of the last year to the end date of the comparable interim period; cash flow statement and statement of changes in equity - on an accrual basis from the beginning of the reporting period to the end date of the interim period; comparative reporting data - for a comparable interim period, on an accrual basis from the beginning of last year.
The accounting policies for interim reporting are the same as for the annual financial statements, except for changes in accounting policies after the annual reporting date. Estimates for interim reporting should be made based on the period from the beginning of the year to the date of the interim reporting. But the principles for recognizing assets and liabilities, income and expenses in interim reporting are the same as those applied in the preparation of annual financial statements.
Interim financial statements for the entire year should be prepared on the basis of uniform accounting policies. Therefore, if the accounting policy changes during the year, all previously presented interim financial statements must be resubmitted with the changes arising from the new accounting policy.
In IFRS - 8 (IFRS) this provision is supplemented. If an entity changes its accounting policy, then all items and profits for prior years are restated. If we assess the effect of changing the accounting policy, then the period from which this rediscounting can be started is selected.
Assets and liabilities in interim financial statements are recognized and measured according to the same rules and criteria that apply in the standards for annual financial statements.
Income and expenses are recognized if they arise from the beginning of the reporting year during the period up to the interim reporting date. Generally, income is recognized when it arises.
IFRS 7 "Statements of Cash Flows"
The purpose of this standard is to reflect in the financial statements information about the changes in cash and cash equivalents, which would be presented in the Statement of Cash Flows.
Cash, according to IFRS 7, is cash and bank accounts, and cash equivalents are all short-term highly liquid investments of cash that are easily convertible into cash and are not subject to significant risk of changes in value.
The general idea of drawing up the Statement of Cash Flows is to determine the incoming and outgoing cash flows arising in the reporting period as a result of operating, investment and financial activities.
Operating activities generate the organization's main revenues and cash flows. Operating also includes any other activity of the organization that is not related to investment or finance. Operating cash flows are generally the result of transactions and events that are part of the determination of net income (loss).
Examples include cash flows such as:
Receiving funds from the sale of goods and the provision of services;
receiving due commissions, fines and penalties;
payments to suppliers for goods and services;
payments to company employees;
tax payments related to operating activities.
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Having summarized and analyzed the objectives of various groups of interested users of accounting (financial) information, the IASB issued IFRS 1 "Presentation of Financial Statements", the purpose of which is to create regulatory framework for the formation and presentation of a single unified accounting (financial) statements general purpose to ensure comparability. To achieve the above objective, IFRS 1 establishes:
Unity of rules for the presentation of accounting (financial) statements;
Minimum requirements for the content of reporting;
IFRS 1 regulates the formation and presentation of all forms of general purpose accounting (financial) statements intended for interested users who are not able to request additional, i.e. more specific information about the economic entity.
The management body of the economic entity is responsible for the preparation and presentation of accounting (financial) statements.
A complete set of accounting (financial) statements must include:
Balance sheet;
Profits and Losses Report;
Statement of changes in equity;
Cash flow statement;
Accounting policy;
Explanatory notes.
Submission by an economic entity of additional financial and non-financial information is encouraged.
Information disclosure. Accounting (financial) statements should be identified and separated from other information provided. At the same time, all IFRS requirements apply only to accounting (financial) statements. All other information is not regulated and is presented at the discretion of the governing body of the economic entity.
Each component of the accounting (financial) statements must be clearly defined.
In addition, all of its forms must indicate:
The name of the economic entity or its other identifying features;
Whether the reporting covers an individual economic entity or a group of entities;
Reporting date or period, depending on the reporting form;
Reporting currency;
The level of accuracy used in reporting figures.
Accounting (financial) statements in accordance with IFRS 1 must be submitted at least once a year. In this case, it is not necessary that it coincides with the calendar one (as is customary in the Russian Federation). The company can independently determine its financial period and strictly observe it from year to year.
In the case of submission of reports in a period other than the above, the economic entity is obliged to provide a justification for this deviation. In doing so, he is obliged to disclose:
The reason for the deviation from the generally accepted period;
The fact that the comparative amounts of the reports are not comparable.
Balance sheet. The main financial report, reflecting the financial position of the organization, is the balance sheet. In international practice, it is presented in two forms:
1) horizontal:
2) vertical:
In practice, the vertical form of the report is more often used.
Balances also differ in terminology.
So, in the United States, the asset of the balance sheet is called assets, and the liability is called liabilities and capital. In Germany, France and Italy, the traditional terms asset and liability are used.
According to the placement of sections and articles (proforma), balances are usually divided into:
American;
English (Anglo-Saxon);
Continental.
In the American balance sheet, asset items are placed in descending order of their liquidity, in English - in ascending order.
Liabilities items in the British and American balance sheets are shown in descending order of demand, starting with liabilities and ending with equity.
In continental balance sheets, by contrast, liability starts with capital.
A feature of the English (Anglo-Saxon) balance sheet is the placement of short-term accounts payable in the asset as a separate counter-item to short-term assets, as well as the presence of an item of net assets. Net assets are also called working capital, and the aggregate of capital and liabilities - used capital.
The schemes of the named balances are as follows.
American balance:
Assets = Liabilities + Equity.
Continental balance:
Assets = Equity + Liabilities.
English (Anglo-Saxon) balance:
Assets - Liabilities = Equity.
All types of balance sheets are recognized as international standards, while IFRS 1 imposes a number of requirements for the presentation of information in the balance sheet.
An economic entity can subdivide its assets and liabilities into short-term and long-term. In the event that such a division is not made, assets and liabilities are allowed to be presented in the order of their liquidity.
It should also be noted that all recoverable and reimbursable amounts must be categorized by reimbursement or redemption maturity within 12 months and beyond.
Short-term assets include:
Assets intended for sale or use in normal business conditions within the normal operating cycle of an economic entity;
Assets held for commercial purposes or used for a short period of time. It is assumed that the economic entity intends to sell them within 12 months from the reporting date;
Assets in the form of cash or cash equivalents without any restrictions on their use.
Short-term liabilities include:
Liabilities expected to be settled under normal business conditions during the normal operating cycle of an economic entity;
Liabilities due to be settled within 12 months after the reporting date.
All other assets and liabilities of the economic entity must be classified as long-term assets and long term duties.
In addition, long-term interest-bearing liabilities, the repayment of which should occur within 12 months, can be classified as non-current only if:
The initial period is a period exceeding 12 months;
There is an intention to refinance this obligation on a long-term basis, with the obligatory securing of this intention by a refinancing agreement.
IFRS 1 also defines the minimum composition of information that must be reflected in the balance sheet.
Minimum information, which must be reflected in the balance sheet is linear items:
Fixed assets;
Intangible assets;
Financial assets;
Investments accounted for using the participation method;
Trade and other receivables;
Debts of buyers and customers and other receivables;
Tax liabilities and tax requirements under IFRS 12 Income Taxes;
Reserves;
Long-term liabilities, including interest payments;
Minority share;
Issued capital and reserves.
Additional line items are disclosed in the balance sheet only when required by IFRS or when their presentation increases the degree of reliability of the financial position of the economic entity.
As other information, presented in the balance sheet or annexes thereto disclose:
Subclassification of articles;
Nature and amounts of receivables and payables:
Parent company,
Related subsidiaries,
Associated companies,
Related parties;
For each class of share capital:
The number of shares authorized for issue,
The number of shares issued and fully paid, as well as issued and paid incompletely,
The par value of a share or an indication of the absence of this value,
Reconciliation of the number of shares at the beginning and the end of the year,
Rights, privileges and restrictions associated with the relevant class of shares,
Shares owned by the company itself, its subsidiaries or associates,
Shares reserved for issue under option or sale agreements;
The nature and purpose of each reserve within the equity of the owners;
Amount of dividends proposed but not officially approved for payment;
Amount of unrecognized dividends Per cumulative preference shares.
Profits and Losses Report. In accordance with IFRS 1, the following elements are reflected in the income statement:
Revenue;
Operating results;
Financing costs;
Share of profits and losses of associates and joint ventures accounted for using the equity method;
Tax expenses;
Profit or loss from ordinary activities;
Emergency outcomes;
Minority share;
Net profit or loss for the period.
Additional information in the income statement can be presented in the statement itself or in its annexes. It may contain a cost analysis:
1) by type of cost (natural format);
2) functions (functional format).
When using the first classification, expenses in the income statement are grouped according to their essence and the report itself is drawn up according to the following scheme:
Revenue ................................................. .................................................. .............................. X
Other operating income.................................................. ......................................... X
Stock changes finished products and work in progress ................... X
Work performed by the company and capitalized ............................................ ...... X
Consumables and raw materials used ............................................. ................... X
Personnel costs ............................................... .................................................. ............. X
Depreciation deductions for tangible and intangible assets ............... X
Other operating expenses ............................................... ............................................ X
Total operating expenses ............................................... ............................................. (X)
Profit from operating activities .............................................. .............................. X
In the second classification, expenses are grouped according to their function as part of cost, sales or administrative expenses. The profit and loss statement is drawn up according to the following scheme:
Revenue ................................................. ............................................. X
Cost of sales ................................................ ..................... (X)
Gross profit................................................ ................................. X
Other operating income ............................................... .......... X
Distribution Cost ............................................... ............. (X)
Administrative expenses................................................ ............ (X)
Other operating expenses ............................................... ....... (X)
Profit from operating activities ........................................ X
Statement of changes in equity. Unlike the balance sheet and income statement, the statement of changes in equity does not have a detailed presentation format. IFRS offers two options for its construction:
1) statement of changes in equity - should include the profits and losses of the organization for the reporting period, while all information should be presented by class of capital;
2) statement of recognized profit and loss - includes only the net effect of the gains and losses recognized in the Equity section. Typically, the statement of changes in equity contains balances for two to three adjacent years.
Cash flow statement. The procedure for drawing up a cash flow statement is governed by IFRS 7 “Cash flow statements”.
Interested users need information about the entity's ability to generate cash and cash equivalents and its cash flow needs. The source of such information in accordance with IFRS 7 is the statement of cash flows, which contains information about changes in cash and cash equivalents of an economic entity for the reporting period.
According to IFRS 7 cash include:
Cash (cash desk);
Demand deposits;
Cash equivalents.
Cash equivalents intended for short-term use monetary obligations and represent short-term, highly liquid investments (investments), easily convertible into cash, with a slight risk of changes in value.
In accordance with IFRS 7 for the preparation of the statement of cash flows, cash flows for the period are classified as:
Cash flows from operating activities;
Cash flows from investment activities;
Cash flows from financing activities.
In chapter operating activities reflects cash from transactions that formed net profit, except for those related to investment and financing activities. These usually include:
Cash receipts from the sale of goods or products, services;
Receipts of funds in the form of interest and dividends (on loans issued, on investments in securities);
Cash payments as payment to suppliers and various expenses (wages, taxes, interest on loans, electricity, etc.).
Transactions classified as operating activities usually affect the accounts of current (current) assets and current (short-term) liabilities.
In chapter investment activities reflects cash from transactions associated with long-term or non-current assets of the organization. These include:
Cash receipts from the sale of fixed assets;
Long-term investments in securities;
Repayment of principal amounts of loans provided to other organizations;
Cash expenditures for the purchase of property, plant and equipment, long-term investments or the provision of loans to other organizations.
In chapter financial activities reflects cash from operations to attract funds from shareholders and creditors and payments of funds to shareholders and creditors, i.e. transactions related to long-term liabilities and own capital organizations. Information about:
Sale of own shares;
Cash receipts from the issuance of bonds and long-term bills;
Cash payments as dividends;
The cost of cash to buy back treasury shares or to repay the principal of long-term liabilities.
The cash flow statement has the following form:
Cash from operating activities ............................................... ............. X
Net cash inflow (outflow) from operating activities ...................... X
Cash from investment activities ............................................. ........... X
Net cash inflow (outflow) from investing activities .................. X
Cash from financial activities ............................................. ................... X
Net cash inflow (outflow) from financing activities .......................... X
Total increase (decrease) in cash ........................................... .................. X
Cash balance at the beginning of the period ............................................ ........................... X
Cash balance at the end of the period ............................................ ............................. X
The notes to the statement of cash flows should also provide information on non-cash transactions, usually involving investment or financial nature(for example, the acquisition of fixed assets on credit, the exchange of some non-monetary assets for others, the redemption of bonds by issuing shares, etc.).
The cash flow statement is prepared on the basis of:
1) balance sheet for the reporting and previous years;
2) profit and loss statement for the current year;
3) additional information (from the General Ledger) about certain transactions, including payments and receipts of cash (for example, a change in the item "Fixed assets" could have occurred as a result of the sale of old fixed assets and the purchase of new ones, paid in part by a bill) and related to investment or financial activities.
There are two methods for compiling a cash flow statement:
2) indirect.
The essence direct method consists in the sequential calculation of the main receipts and payments of cash from operating activities; the difference is net cash inflow or outflow from operating activities.
Indirect method represents the transformation of net profit into the net amount of received (spent) cash, an adjustment to the amount of net profit for non-cash items. As a result of using this method, the user receives information only on the net inflow (outflow) of cash from operating activities, and individual receipts and payments remain outside the scope of the report.
Accounting policy. According to international financial reporting standards under accounting policies understand the specific principles, fundamentals, conditions, rules and their practical application adopted by an economic entity for the preparation and presentation of accounting (financial) statements.
The organization's management should form and apply accounting policies in such a way that all accounting (financial) statements comply with the requirements of each applicable IFRS.
In the event that there is no specific requirement or international financial reporting standard, the management of the economic entity should develop accounting policies based on their judgments. It should be borne in mind that interested users of accounting (financial) statements should be provided with the most useful information that allows them to make optimal economic decisions.
When developing accounting policies, the management of an economic entity should rely on the requirements of international financial reporting standards related to similar or related problems and situations, as well as apply the criteria for determining, recognizing and evaluating elements of financial statements established in IFRS.
And one more important point. Despite the possibility of the existence of a decision of the authorities and bodies setting national standards, as well as the established industry practice on a specific issue, the development of accounting policies should be guided by the principles of IFRS.
According to international financial reporting standards, the elements of accounting policies subject to disclosure should include only those disclosure of which will help interested qualified users understand how transactions and facts are reflected in the performance indicators of the financial and economic activity and the financial position of an economic entity.
In accordance with IFRS, the accounting policy section should describe:
Accounting principles and methods chosen by the organization;
The accounting principles and methods that are most typical for the industry;
Compliance with international financial reporting standards.
Accounting policies in accordance with IFRS may include the following sections:
The main approaches to the preparation of consolidated financial statements;
Investments in associates;
Cooperative activity;
Business reputation (goodwill);
Research and development;
Software development costs;
Other intangible assets;
Investments;
Investments in real estate;
Fixed assets;
Accounting for lease transactions;
Government subsidies;
Inventories;
Construction contracts;
Cash and cash equivalents;
Reserves for future expenses and payments;
Deferred income taxes;
Revenue recognition;
Comparative indicators.
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