PBU 23 11 brief description. For accounting "statement of cash flows"
On March 29, 2011, the Ministry of Justice registered a new PBU "Statement of cash flows", approved by the Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n. It is perfect new document, which had no analogues among PBU before. At the same time, its similarity is the International Financial Reporting Standard IAS 7 (IAS 7 "Statements of Cash Flows").
This Statement applies to report on in cases where the preparation, submission and (or) publication of this report is provided for by the legislation of the Russian Federation or regulatory legal acts, as well as when the organization voluntarily decided to submit and (or) publish such a report.
For reference. In accordance with clause 85 of the Regulation on accounting and accounting statements in the Russian Federation (Approved by Order of the Ministry of Finance of Russia dated July 29, 1998 N 34n), small businesses and non-profit organizations are allowed not to submit a cash flow statement.
First of all, we note that the indicators of the organization's cash flow statement are reflected in the currency of the Russian Federation - rubles (thousand rubles, million rubles). The amount of cash flows in foreign currency is converted into rubles at the official exchange rate as of the date of payment or receipt of payment. In case of an insignificant change in the official exchange rate of foreign currency against the ruble, the conversion can be made at the average exchange rate calculated for a month or a shorter period. A cash flow statement is a summary of data on cash and highly liquid financial investments. The latter may include, for example, demand deposits opened with credit institutions. Highly liquid financial investments- these are cash equivalents that can be easily converted into a predetermined amount of cash and are subject to an insignificant risk of changes in value (hereinafter referred to as cash equivalents) (clause 5 of PBU 23/2011).
Here is another definition that is widely used in the commented PBU. Cash flows - payments of the organization and receipts to the organization of cash and cash equivalents.
Cash flows are not:
- cash payments associated with their investment in cash equivalents, and vice versa, cash receipts from the repayment of cash equivalents (excluding accrued interest);
- foreign exchange operations (excluding losses or benefits from the operation);
- exchange of some cash equivalents for other cash equivalents (excluding losses or benefits from the operation);
- other similar payments and receipts (for example, receiving cash from a bank account, transferring funds from one account of an organization to another account of the same organization (clause 6 of PBU 23/2011)).
Depending on the nature of the transactions with which they are associated cash flows, as well as on how information about them is used to make decisions by users of the organization's financial statements, they are divided into cash flows from current, investment and financial transactions (clauses 7, 8 of PBU 23/2011).
Cash flows from current operations... These are cash flows from transactions related to the implementation ordinary activities a revenue-generating organization. Clause 9 provides examples of such cash flows:
a) receipts from the sale of products and goods to buyers (customers), the performance of work, the provision of services;
b) receipts lease payments, royalties, commissions and other similar payments;
c) payments to suppliers (contractors) for raw materials, materials, works, services;
d) remuneration of employees of the organization;
e) payment of corporate income tax;
f) payment of interest on debt obligations, with the exception of interest included in the cost investment assets;
g) receipt of interest on accounts receivable buyers (customers);
h) cash flows on financial investments purchased for the purpose of their resale in the short term (as a rule, within three months).
Cash flows from investment operations... These are the organization's cash flows from operations related to the acquisition, creation or disposal of non-current assets (clause 10 of PBU 23/2011).
Examples of cash flows from investment transactions are:
a) payments to suppliers (contractors) and employees of the organization in connection with the acquisition, creation, modernization, reconstruction and preparation for the use of non-current assets, including R&D costs;
b) payment of interest on debt obligations included in the value of investment assets in accordance with RAS 15/2008;
c) receipts from the sale of non-current assets;
d) payments in connection with the acquisition of shares (proceeds from the sale of shares) in other organizations, with the exception of financial investments acquired (acquired) for the purpose of resale in the short term;
e) provision (return) of loans to other persons (provided to other persons);
f) payments in connection with the acquisition of debt securities (receipts from the sale of debt securities) (rights to claim funds against other persons), except for financial investments acquired (purchased) for the purpose of resale in the short term;
g) dividends and similar receipts from equity participation in other organizations;
h) receipt of interest on debt financial investments, with the exception of those acquired for the purpose of resale in the short term.
Cash flows from financial transactions... These are cash flows from operations related to attracting financing by the organization on a debt or equity basis, leading to a change in the size and structure of capital and borrowed money organizations (clause 11 PBU 23/2011), primarily:
but) cash deposits owners (participants), proceeds from the issue of shares, increase in participation interests;
b) payments to owners (participants) in connection with the redemption of shares (participation interests) of the organization from them or their withdrawal from the membership of the participants;
c) payment of dividends and other payments for the distribution of profits in favor of the owners (participants);
d) receipts from the issue of bonds, bills of exchange and other debt securities;
e) payments in connection with the redemption (redemption) of bills of exchange and other debt securities;
f) obtaining credits and loans from other persons;
g) return of loans and borrowings received from other persons.
If the accountant cannot unambiguously qualify certain cash flows (named in clauses 8-11 of this PBU), they should be reflected in the section "Cash flows from current activities" (clause 12 of PBU 23/2011).
If payments and receipts from one operation can relate to different types of cash flows (for example, interest payment is a cash flow from current operations, and the return of the principal amount of debt is a cash flow from financial transactions, but when the loan is repaid in cash, both of these parts can paid in one amount) - in this case, the organization divides the single amount into the corresponding parts, followed by a separate classification of cash flows and their separate reflection in the cash flow statement (clause 13 of PBU 23/2011).
In clauses 16, 17 of PBU 23/2011, examples are given when the organization's cash flows are reflected in the cash flow statement on a net basis.
Firstly, these are cases when they characterize not so much the activities of the organization as the activities of its counterparties and (or) when receipts from some persons determine the corresponding payments to others, for example:
- cash flows of a commission agent or agent in connection with the performance of commission or agency services by them (except for fees for the services themselves);
- indirect taxes as part of receipts from buyers and customers, payments to suppliers and contractors and payments to the budgetary system of the Russian Federation or reimbursement from it;
- receipts from the counterparty on account of reimbursement of utility bills and the implementation of these payments in lease and other similar relations;
- payment for the transportation of goods with receipt of equivalent compensation from the counterparty.
The main criterion indicating that the payments of the organization (receipts to the organization) are subject to minimized reflection - the lack of connection of cash flows with the main activities of the enterprise. The purpose of the relevant data in the report is to show the users of financial statements the level of the organization's provision of funds (cash flows from current operations), the level of costs incurred to acquire or create non-current assets (cash flows from investment operations), to provide a basis for predicting the claims of creditors and shareholders in relation to future cash flows (cash flows from financial transactions). Therefore, in the above cases, it is suggested not to "clutter up" the report with "unnecessary" information. At the same time, according to the author, it would not be a mistake to indicate the disputed cash flows in detail.
Secondly, when they are distinguished by fast turnover, large amounts and short repayment periods, for example:
- mutually conditioned payments and receipts for settlements using bank cards;
- purchase and resale of financial investments;
- implementation of short-term (usually up to three months) financial investments at the expense of borrowed funds.
The balances of cash and cash equivalents in foreign currency at the beginning and end of the reporting period are reflected in the cash flow statement in rubles in the amount determined in accordance with RAS 3/2006 "Accounting for assets and liabilities, the value of which is expressed in foreign currency". The difference arising from the translation of the organization's cash flows and balances of cash and cash equivalents in foreign currency at rates for different dates is reflected in the report separately from the organization's current, investment and financial cash flows as the effect of changes in the exchange rate of foreign currency against the ruble ( Clause 19 PBU 23/2011).
Disclosure of information in financial statements... Traditionally, the last section of the PBU is a list of information that is subject to mandatory reflection in the organization's financial statements. PBU 23/2011 is no exception.
IN accounting policy for accounting purposes, information should be disclosed on the approaches used to separate cash equivalents from other financial investments, to translate cash flows in foreign currency into rubles, for a condensed presentation of cash flows, as well as other explanations necessary to understand the information presented in the report cash flow (clause 23 PBU 23/2011). The entity discloses as of reporting date opportunities to raise additional funds, for example, the amount of credit lines opened but not used by it, the amount of funds that can be received on an overdraft basis, the amount of loans not received as of the reporting date, etc. In addition, disclosed (subject to materiality ): available amounts of cash (or cash equivalents) not available for use (for example, letters of credit opened in favor of other organizations on transactions pending at the reporting date), cash flows from current, investment and financial transactions for each reportable segment (defined in according to PBU 12/2010 "Information by segments"), etc. That is, in addition to filling out the report itself, the accountant will need to work on an explanation to it.
Ministry of Finance of the Russian Federation
ORDER
ON APPROVAL OF THE REGULATIONS
ACCOUNTING ACCOUNTING "CASH FLOW REPORT"
(PBU 23/2011)
In order to improve legal regulation in the field of accounting and financial reporting and in accordance with the Regulations on the Ministry of Finance of the Russian Federation, approved by Resolution of the Government of the Russian Federation of June 30, 2004 N 329 (Collected Legislation of the Russian Federation, 2004, N 31, Art. 3258; N 49, Art 4908; 2005, N 23, Art 2270; N 52, Art 5755; 2006, N 32, Art 3569; N 47, Art 4900; 2007, N 23, Art 2801 ; N 45, Art. 5491; 2008, N 5, Art. 411; N 46, Art. 5337; 2009, N 3, Art. 378; N 6, Art. 738; N 8, Art. 973; N 11, Art. 1312; N 26, Art. 3212; N 31, Art. 3954; 2010, N 5, Art. 531; N 9, Art. 967; N 11, Art. 1224; N 26, Art. 3350; N 38 , art. 4844; 2011, N 1, art. 238), I order:
1. To approve the attached Regulation on accounting"Statement of cash flows" (PBU 23/2011).
2. To establish that this Order comes into force starting from the financial statements for 2011.
Deputy
Prime Minister
Russian Federation -
Minister of Finance
Russian Federation
A.L. KUDRIN
Approved by
By order of the Ministry of Finance
Russian Federation
from 02.02.2011 N 11n
Accounting regulation "statement of cash flows" (pbu 23/2011)
I. General Provisions
1. This Regulation establishes the rules for drawing up a cash flow statement by commercial organizations (with the exception of credit institutions) that are legal entities under the legislation of the Russian Federation (hereinafter referred to as organizations).
2. This Regulation is applied to the preparation of a cash flow statement in cases where the preparation, and (or) presentation, and (or) publication of this report is provided for by the legislation of the Russian Federation or regulatory legal acts, and also when the organization has voluntarily decided to submit and (or) the publication of such a report.
This Regulation does not apply to the preparation of the organization's reporting for internal purposes, reporting prepared for state statistical observation, reporting information submitted credit institution in accordance with its requirements, and reporting information for other special purposes, if the rules for drawing up such reports and information do not provide for the application of this Regulation.
3. The statement of cash flows is included in the accounting statements of the organization.
4. A cash flow statement is drawn up on the basis of the general requirements for the organization's financial statements, established by regulatory legal acts on accounting, and the requirements established by this Regulation.
5. The statement of cash flows is a summary of data on cash and highly liquid financial investments that can be easily converted into a predetermined amount of cash and which are subject to an insignificant risk of changes in value (hereinafter referred to as cash equivalents). Cash equivalents can include, for example, demand deposits opened with credit institutions.
6. The statement of cash flows reflects the payments of the organization and receipts to the organization of cash and cash equivalents (hereinafter - the cash flows of the organization), as well as balances of cash and cash equivalents at the beginning and end of the reporting period.
The organization's cash flows are not:
a) payments of funds associated with their investment in cash equivalents;
b) cash receipts from the repayment of cash equivalents (excluding accrued interest);
c) foreign exchange operations (excluding losses or benefits from the operation);
d) exchange of some cash equivalents for other cash equivalents (excluding losses or benefits from the operation);
e) other similar payments of the organization and receipts to the organization that change the composition of cash or cash equivalents, but do not change their total amount, including receiving cash from a bank account, transferring funds from one account of the organization to another account of the same organization.
Order of the Ministry of Finance of the Russian Federation of February 2, 2011 No. 11n "On approval of the Accounting Regulations" Statement of Cash Flows "(PBU 23/2011)" was registered with the Ministry of Justice on March 23, 2011.
The Regulation establishes that the statement of cash flows reflects the payments of the organization and receipts of cash (flows) to it, as well as balances at the beginning and end of the reporting period. Clause 6 of Part 1 of the Regulation lists those payments and receipts that are not cash flows.
The organization's cash flows show the level of the organization's security with cash sufficient to repay loans, maintain operations, etc. without attracting external finance.
The organization's cash flows are reflected in the statement of cash flows with a subdivision into cash flows from current, investment and financial transactions.
Accordingly, examples of cash flows from current operations are given in clause 9 of part 2. These include receipts directly from the sale of products, rent, payments to suppliers, employee compensation, etc.
Examples of cash flows from investment transactions are receipts or payments related to shares, dividends from equity interests in other entities, etc. Such flows are listed in detail in clause 10, part 2.
The flows from financial transactions include cash deposits of owners (participants), receipts from the issue of shares, an increase in participation interests, payments to owners (participants) in connection with the repurchase of shares (participation interests) of the organization from them or their withdrawal from the membership of participants, obtaining loans and borrowings from others, etc. They can be found in clause 11, part 2 of the document.
All significant cash flows are reflected in the statement. They can be reflected minimally in cases when they characterize not so much the activities of the organization as the activities of its counterparties, when receipts from some persons determine the corresponding payments to others, and also when they differ in fast turnover, large amounts and short return periods.
All indicators must be presented in rubles. Foreign currency flows are converted into rubles at the exchange rate on the day the payment is received or made.
The difference arising from the translation of the organization's cash flows and balances in foreign currencies at rates for different dates is reflected in the cash flow statement separately from the rest as the effect of changes in the foreign currency exchange rate against the ruble. Cash flows associated with the activities of subsidiaries are also shown separately.
The presence of additional explanations is accompanied by a link in the corresponding article.
Clause 24 h. 4 of the Regulation lists funds that can be raised by the organization and which also need to be disclosed in the report.
The document comes into force starting with the financial statements for 2011, but it cannot serve as a basis for applying sanctions to organizations for failure to comply with the instructions contained in it until it is published.
Comparative characteristics PBU 23/2011 and IFRS 7 "Statement of Cash Flows"
Accounting information in the current conditions of the institutional business environment is becoming the most important and relevant in the development of a new accounting methodology adequate to the conditions of globalization and integration. The introduction of International Financial Reporting Standards (IFRS) is an essential step in creating a favorable investment climate and, accordingly, financial growth.
The convergence of Russian accounting regulations (RAP) with International Financial Reporting Standards (IFRS) is currently underway. One of the proofs of this is the emergence of PBU 23/2011, which is analogous to IAS 7 “Statement of Cash Flows”.
In 2011, by Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n, a new Accounting Regulation “Cash Flow Statement” (PBU 23/2011) was approved. For the first time in Russian practice, a procedure has appeared in how to reflect cash and its flows in the statement of cash flows. PBU 23/2011 is mainly aimed at a detailed disclosure of the concepts and principles of the classification of cash flows. However, unlike IAS 7, it does not have methods for generating cash flows.
There is a difference in the definition of cash equivalents. The definition of cash equivalents given in IAS 7 clearly refers to them as short-term highly liquid investments that are easily convertible into pre-known amounts of cash and are subject to an insignificant risk of changes in their value, while PBU 23/2011 does not differentiate the maturity of financial investments. ...
According to the classification of cash flows, investments in other objects for a period of up to 1 year refer to a short-term cash flow, for a period of more than 1 year - to a long-term cash flow. It should also be borne in mind that the adoption of a term of 1 year as a criterion for dividing cash flows by their duration is conditional.
The accountant, in accordance with PBU 23/2011, as a result of applying his professional judgment, can attribute both short-term financial investments and long-term ones to cash equivalents. The latter, in turn, contradict one of the conditions for the recognition of financial investments as cash equivalents, and it is financial investments that should be subject to an insignificant risk of changes in their value.
Long-term financial investments contradict this condition, since it is very difficult to predict and calculate the degree of risk of changes in the value of financial investments in the long term, due to the fact that changes in value may be associated with uncontrollable and unforeseen external events. In addition, the classification of long-term financial investments as cash equivalents will underestimate the balance of cash flows from investment operations.
In other words, the activity of the organization in investment activities decreases, since it is in investment activities that debt securities(the right to claim funds against other persons), with the exception of financial investments acquired for the purpose of resale in the short term. But on the other hand, the re-qualification of long-term financial investments into cash equivalents will affect the change in the organization's solvency, on which creditors focus their attention. In this way, the ratios of the current, quick and absolute liquidity will be overestimated.
As a result of classifying short-term or long-term financial investments as cash equivalents in accordance with PBU 23/2011, re-qualification occurs in the items of current assets or items of current assets and non-current assets, respectively. The value of monetary funds and their equivalents is increasing, which, as a result, leads to an overestimation of the indicators of solvency and liquidity.
Having analyzed the above differences, we can conclude that the Russian standard provides considerable freedom to the accountant in using his professional judgment when referring financial investments to cash equivalents. A definition of cash equivalents under IFRS is more precise and specific, since only short-term financial investments can be attributed to them.
However, according to IAS 7, the accountant may have questions related to the term "investments" (the term "financial investments" is used in RAP). The accountant can also resolve this issue by using his professional judgment, taking into account the provisions of IFRS.
It should be noted that PBU 23/2011 does not define either operational or current activities, but uses such a concept as "cash flows from current operations".
In IAS 7, the definition of operating activities is set out briefly and fairly clearly, that is, an accountant, having determined what operations he refers to as investment and financial activities, all other operations related to the main income-generating activities and other activities are classified as operating activities.
Quite differently, the case is in RAP, which provides the definition of "cash flows from current operations". In accordance with this definition, cash flows from current operations can be classified as cash flows from ordinary activities that generate revenue. In addition, there is the following addition to this definition: cash flows from current operations, as a rule, are associated with the formation of the profit (loss) of the organization from sales.
There are also differences in cash flows from operating activities between RAP and IFRS. The first difference is a consequence of differences in the scope of IAS 7 and PBU 23/2011. That is, in accordance with IAS 7, examples of cash flows from operating activities include cash receipts and payments under contracts concluded for commercial or trade purposes, while according to PBU 23/2011, cash flows from current operations are related to, eg:
payment of interest on debt obligations, with the exception of interest included in the value of investment assets;
receipt of interest on accounts receivable of buyers (customers);
The second characteristic feature associated with the cash flows of insurance organizations is the cash receipts and payments of the insurance company on insurance premiums, claims, annuities and other insurance benefits are given in the examples of cash flows from operating activities in IAS 7, while in PBU 23 / 2011 nothing was said about the cash flows of insurance organizations. This difference is due to the fact that for commercial organizations that carry out specific types of activities (in this case, insurance organizations), there is a regulatory framework.
There is also a difference in the qualifications of the interest received. IAS 7 allows the resulting interest to be attributed to both operating and investing activities, depending on the professional judgment of the accountant. An accountant can classify income as interest to the first type, based on the fact that these incomes are included in the definition of profit, to the second type of activity - referring to the fact that these incomes represent investment income. The choice of one or another type of activity fully meets the definitions of the relevant types of activity given in IAS 7. When choosing to classify these incomes as investment activities, the balance of cash flows from operating activities and a negative balance of cash flows from investment activities will be underestimated, which is an unfavorable indicator of the company's activities for users of financial statements.
Accounting Regulation 23/2011 classifies the income of interest on debt financial investments, with the exception of those acquired for the purpose of resale in the short term, to cash flows from investment operations. The attribution of interest received on financial investments to the investment operations of the organization does not contradict the definition of cash flows from investment operations, since these receipts are associated with the acquisition of non-current assets of the enterprise.
International Financial Reporting Standard (IAS) 7 provides more opportunity for an accountant to apply his professional judgment when classifying the interest received to one or another type of cash flows.
There are also differences in the definition of investment activity. First, it should be noted that PBU 23/2011 does not define investment activity, but uses such a concept as "cash flows from investment operations" (as it was described in the case of operating activities). Secondly, in accordance with RAP, cash flows from investment transactions can only include transactions related to changes in non-current assets, that is, they are immediately limited to the concept of long-term. And in accordance with IFRS, investment activities, as well as in PBU 23/2011, include activities related to long-term assets, and the distinctive point is that these activities may include other investments that the accountant, according to his professional judgment, does not attributed to cash equivalents.
Therefore, short-term investments can also be attributed to investment activities, since cash equivalents under IAS 7 are only short-term highly liquid investments for which sums of money receivable and there is an insignificant risk of changes in their value. With regard to investing activities, IFRSs also provide the accountant with more scope to exercise their professional judgment, which does not contradict the examples listed in IAS 7 related to investing activities.
There are also differences in the guidelines for the preparation of the statement of cash flows. In accordance with IAS 7, the statement of cash flows in terms of reflecting cash flows from operating activities can be drawn up directly or indirectly. The direct method, in turn, is also divided into two compilation options: information is taken from accounting records or the amount of revenue, cost price and other items of the statement of total profit (in RAP - a statement of financial results). The statement of cash flows in terms of reflection of investment and financial activities is prepared only by the direct method. In accordance with the approved form of the cash flow statement in RAP, it is drawn up by the direct method.
It should be noted that when applying one or another type and method of calculating cash flow, it should be remembered that a number of problems can reduce its informative value.
The structure and composition of the cash flow statement indicators in accordance with RAS 23/2011 and IFRS 7 “Cash flow statement” is presented in Table 1.4. The information presented allows you to clearly see the differences between PBU 23/2011 and its international counterpart.
Table 1.4
The structure and composition of the indicators of the cash flow statement
Name |
||
Presentation of cash flows from investing activities |
In accordance with clause 10, this is the movement of money on transactions related to the acquisition, creation or disposal of non-current assets of the company, information on cash flows from investment operations shows users of the organization's financial statements the level of expenses of the organization made to acquire or create non-current assets that provide cash receipts in future. |
Investment activity - the purchase and sale of long-term assets and other investments not related to cash equivalents (clause 6 of IFRS 7). IFRS 7 does not include investments representing cash equivalents in investing activities. In accordance with paragraph 7 of IFRS 7, an investment, in order to qualify as a cash equivalent, must be easily convertible into a certain amount of cash, and be subject to an insignificant risk of changes in value (paragraph 15 of IFRS 7). |
Presentation of cash flows from financing activities |
In accordance with clause 11, the movement of money from operations related to attracting financing on a debt or equity basis, leading to a change in the size and structure of the capital and borrowed funds of the company. Information about cash flows from financial transactions provides a basis for forecasting claims of creditors and shareholders (participants) in relation to the future cash flows of the organization, as well as the future needs of the organization to raise debt and equity financing of cash flows from financing activities |
Bank loans are generally viewed as a financial activity. However, if bank overdrafts that are recoverable on demand form an integral part of the company's cash management, they are included as a component of cash and cash equivalents (paragraph 8 of IFRS 7). |
Presentation of cash flows from operating activities |
In accordance with clause 9, these are activities related to the implementation of the usual detail of the revenue-generating entity. Cash flows of the organization from current operations, as a rule, are associated with the formation of the profit (loss) of the organization from sales. |
The company must present cash flows from operating activities using either the direct method or the indirect method (paragraph 18 of IFRS 7). |
The ability to use the net method |
In accordance with clause 16, cash flows are reflected on a net basis when cash flows characterize not so much the activities of the organization as the activities of its counterparties, and (or) when receipts from some persons determine the corresponding payments to others. In accordance with clause 17, cash flows are shown on a net basis when cash flows are characterized by fast turnover, large amounts and short repayment periods. |
In accordance with paragraph 22 of IFRS 7, cash flows arising from operating, investing or financing activities can be presented in the statement of cash flows in a net value:
|
Disclosure of information on payment of dividends |
In accordance with clause 9, information on cash flows from current operations shows the users of the organization's financial statements the level of provision of the organization with sufficient funds to repay loans, maintain the organization's activities at the level of existing production volumes, pay dividends and new investments without attracting external sources of financing. Information about the composition of cash flows from current operations in previous periods, combined with other information presented in the accounting statements of an organization, provides a basis for forecasting future cash flows from current operations. |
In accordance with paragraph 34 of IFRS 7, dividends paid can be classified as financial flows funds, since they are the cost of attracting financial resources... At the same time, in order to assist users in determining the company's ability to pay dividends from operating cash flows, the dividends paid may be classified as a component of operating cash flows. |
Disclosure of income tax payments |
In accordance with clause 9 (sub. E) within current activities (except for cases when corporate income tax is directly related to cash flows from investment or financial transactions). |
Cash flows arising from income tax should be disclosed separately and classified as cash flows from operating (current) activities, unless they can be specifically linked to financing or investing activities (paragraphs 35, 36 of IFRS 7). |
Disclosure of funds not available for use |
In accordance with paragraph 25, an organization discloses, taking into account materiality, the following information: a) the available material amounts of cash (or cash equivalents) that, as of the reporting date, are not available for use by the organization (for example, letters of credit opened in favor of other organizations on outstanding date of transactions) indicating the reasons for these restrictions. |
In accordance with paragraph 48 of IFRS 7, an entity is required to disclose, together with a commentary by management, the amount of significant cash and cash equivalents held but not available for use. |
Conclusions for chapter 1
Cash is the organization's financial resources, the most highly liquid assets possible to ensure the fulfillment of obligations of any level and type. Timeliness of repayment depends on their availability accounts payable organizations.
Functions of funds; medium of exchange, measure of value, means of accumulation, means of payment and world money.
The main regulatory document governing new order conducting cash transactions, is the Ordinance of the Bank of Russia dated 11.03.2014 No. 3210-U "On the procedure for conducting cash transactions legal entities and the simplified procedure for conducting cash transactions by individual entrepreneurs and small businesses ", which entered into force on 04.06.2014. According to the new order, for individual entrepreneurs and small businesses (small businesses), the limit on the amount of cash at the cash desk has been lifted. The limit rule remains only for non-small business organizations. In the context of the recognition of IFRS as official in the Russian Federation, it becomes necessary to analyze the provisions Russian situation on accounting PBU 23/2011 with its international analogue IFRS (IAS) 7 “Statement of Cash Flows”. Comparative characteristics of these documents showed that there are a number of significant differences in the order of reflection of cash flows when drawing up a cash flow statement under Russian and international rules. International Financial Reporting Standard (IAS) 7 provides more opportunity for an accountant to apply his professional judgment in generating cash flows.
"International accounting", 2011, N 33
The article compares the Accounting Regulations "Statement of Cash Flows" (PBU 23/2011), approved by Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n, with similar international GAAP and IFRS standards. Such a comparison is interesting for a theoretical scientific research and practical application of this normative document, which is necessary for the correct and consistent compilation of the statement of cash flows in the financial statements.
System standards financial accounting are developed for keeping records and compiling financial statements... These are normative documents, the provisions of which must be taken into account by the developers of various methodological guidelines regulating the completeness, structure and content of financial statements.
A brief history of the issue. The statement of cash flows has been included in the financial statements of Russian enterprises starting from the statements for 1997. Over the 14 years that have passed since that time, great changes have taken place and a lot of work has been done in the field of building a new system of Russian financial accounting and financial reporting. Starting from the reporting for 2004, the Ministry of Finance of Russia allowed the use of the International Financial Reporting Standard (IFRS) (IAS) 7 "Statement of Cash Flows" in the preparation of the report. This was due to the lack of a national standard, which was developed only in 2011. At present, the cash flow statement must be filled out in accordance with the Order of the Ministry of Finance of Russia dated 02.07.2010 N 66n "On the forms of financial statements of organizations" (hereinafter - Order N 66n ) (Table 1).
Table 1
Cash flow statement for _________ 20__
First of all, you need to pay attention to the change in terminology that has been used in the cash flow statement since 2011. In accordance with the Order of the Ministry of Finance of Russia dated July 22, 2003 N 67n "On the forms of financial statements of organizations" (hereinafter - Order N 67n) in form N 4 the term “net increase (decrease) in cash” was used to refer to net cash flow. Starting from the reporting for 2011, in accordance with Order No. 66n, the term "cash flow result" is used for this.
Also, the comparison new form of the report with the form, which should have been submitted in accordance with Order No. 67n, shows that there was another convergence of Form No. 4 with IFRS, while maintaining the differences associated both with the construction of the form itself and with general differences between Russian accounting standards (RAS) and IFRS. To confirm this thesis, we present the scheme of the cash flow statement, which should be compiled in accordance with IFRS by the direct method:
Sample Statement of Cash Flows (IFRS 7)
Cash flowfrom operating activities <*>:
Receipts x
Disposal (x)
Net cash flow from operating activities xxx
Cash flow
from investment activities:
Receipts x
Disposal (x)
Net cash flow from investing activities xxx
Flow of funds
from financial activities:
Receipts x
Disposal (x)
Net cash flow from financing activities xxx
Effect of Exchange Rate Changes on Cash and Cash
equivalents
Net change in cash and cash equivalents xxx
Cash and cash equivalents at start up x
period
Cash and cash equivalents at end x
period <*>In international terminology, the current activity is called an operating activity.
Note to the report. List of all non-cash transactions of an investment and financial nature for the period ...
As a convergence with IFRS, we can note the fact that starting from the reporting for 2011 in Form No. 4 of the Russian reporting, as in IFRS, the cash balances at the beginning and end of the period are joined together at the end of the report. In international standards, this structure of the report is explained by the need to reconcile the initial and final balances of cash and cash equivalents included in the cash flow statement with the balance sheet data. As a result of this approach, in accordance with IFRS, adding (algebraically) to the aggregate net cash flow the cash balance at the beginning of the period, the preparer will always receive the cash balance at the end of the period. When compiling a report in accordance with RAS, the use of such a scheme in a large number of enterprises will immediately reveal the difference between the data of Form N N 4 and 1. This is due to the fact that there are still differences associated with the methodology for constructing the report form. The line "The value of the impact of changes in the exchange rate of foreign currency in relation to the ruble" in Form No. 4, in contrast to IFRS, is moved outside the already defined net cash flow. Due to this circumstance, for such enterprises, the amount indicated in this line always distorts the balance and turnover in the Russian statement of cash flows and leads to a gap with the balance sheet.
It should also be noted that, in accordance with IFRS, the statement of cash flows for operating activities can be drawn up both by the direct and indirect method, while the Russian report is supposed to be prepared only by the direct method, which can be seen from its structure.
Considering that Russian financial accounting is being reformed in accordance with IFRS, these standards are taken as the basis for comparing and comparing Russian regulations and reporting practice. However, it is known that both the format of the cash flow statement and the standard dedicated to it were originally developed in the US GAAP (Generally Accepted Accounting Principles, US GAAP - the system of standards and principles of financial accounting used in the United States). It was from this system that all the basic principles and rules for the formation of the report were taken in IFRS. In this regard, a comparison of the Accounting Regulations "Statement of Cash Flows" (PBU 23/2011), approved by Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n (hereinafter referred to as PBU 23/2011), and the provisions of some others normative documents RAS is produced not only with IAS 7, but also with GAAP (FAS 95), which allows for a deeper analysis. It should be noted that GAAP also uses FAS 102 "Statement of Cash Flows - Exceptions for Certain Enterprises and Classification of Cash Flows from Certain Types of Securities Purchased for Resale" and FAS 104 Standard " cash flow - a statement of net cash receipts and payments for certain transactions and the classification of cash in hedging transactions "(Table 2).
table 2
Comparative characteristics of the main provisions of the standards on the preparation of the statement of cash flows
N p / p | The provisions standard | IAS 7 | GAAP (FAS 95) | RAS (PBU 23/2011) |
1 | purpose | The purpose of this standard consists in demand providing information about historical changes in funds and equivalents Money company through traffic reports Money. Information about cash flow company funds is useful because it gives users financial reporting framework for rate ability companies create cash and their equivalents, its needs for cash means. Economic solutions, adopted users, require evaluation ability companies create cash and their equivalents, distribution in time and certainty of their creation | Report data help estimate: 1. Ability enterprises provide in the future excess tributaries Money over their outflow. 2. Ability enterprises answer by to their obligations, pay off dividends and satisfy all needs in the external financing. 3. Reasons divergences between clean profit and net cash stream. 4. Influence investment and financial activities on financial position enterprises | The goal is not formulated |
2 | Sphere application | This standard demands from everyone companies representation traffic report Money, since monetary funds any company regardless specifics of its activities | Traffic report Money should be included in quality component part in full set financial reporting any enterprises (with the exception of non-profit organizations) | PBU 23/2011 sets regulations drawing up traffic report Money commercial organizations (with the exception of credit organizations), being legal persons on legislation RF. PBU 23/2011 does not apply when drawing up reporting organizations for internal goals, reporting, compiled for state statistical observation, reporting information, submitted credit organizations in compliance with its requirements, and reporting information for other special goals if in rules drawing up such reporting and information not envisaged application PBU 23/2011 |
3 | Representation report on movement cash funds and general provisions | Traffic report Money should submit traffic data Money for the period, classifying them in the operating room, investment or financial activities. Company presents traffic data Money from the operating room, investment or financial activities, since it is more corresponds to the nature of her activities. One the same operation may include receipts and cash payments funds, classified differently | Traffic report Money should reflect net cash streams, educated during reporting period during operating room, investment and financial activities organizations. Harmonization initial and final leftovers cash and equated to them funds included in Traffic report Money | Traffic report Money compiled on on the basis of common requirements for accounting reporting organizations, established regulatory legal acts on accounting accounting, and requirements, established PBU 23/2011. Cash flows organization subdivided into cash flows from the current ones, investment and financial operations. Cash flows organization classified depending on the character operations with which they related as well on how way information about them is used for decision making users accounting reporting organization |
4 | Obligation inclusion in structure financial reporting | The company is obliged prepare a report on cash flow funds according with requirements the present standard and submit it to as an integral part of its financial reporting for every period, in which presented financial reporting | Traffic report Money necessarily should be included as component part in full set of general financial reporting for external users any enterprises | Traffic report Money is part of accounting reporting organization |
5 | Terms and their definitions | Cash funds - include money in checkout and current company account. Equivalent Money - short-term, highly liquid attachments, easy convertible into known in advance cash amount funds and exposed insignificant risk of change their cost. Cash flow funds - receipts and cash payments funds and their equivalents. Operating room activity - the main revenue-generating activity companies and other activity, different from investment and financial activities. Investment activity - acquisition and sale long-term assets and other investments, not related to cash equivalents. Financial activity - activity, which leads to changes in size and composition own capital and debt company funds | Cash equivalents - highly liquid investments, which: - may be exchanged for known amount cash funds; - maturity which 3 months. or less to maturity dates and have minor risk of change cost due changes interest rates. Direct method - method that allows to define net cash flow from operating room activities for account of transactions, associated with monetary receipts and payments, not associated with net profit. Financial activity - operations companies, related with purchase and selling capital (borrowing, sale of shares, payment of debts etc.). Indirect method - method, which the allows to define net cash flow from operating room activities for score adjustments net profit, received for income account and expenses not associated with monetary operations. Investment activity - operations companies, connected with investment in long-term assets (purchase and sale buildings, structures, equipment etc.). Operating room activity - operations not related to investment and financial activities, mostly connected with production products or services | Traffic report Money presents a generalization data on monetary means, as well as highly liquid financial investments, which can to be easy addressed to known in advance cash amount funds that subject to insignificant risk of change cost (hereinafter - cash equivalents). Cash flows organizations from operations, associated with implementation the usual activities organizations, bringing revenue, classified like money flows from current operations. Cash flows from current operations like usually related with the formation profit (loss) organizations from sales. Cash flows organization from operations, related with the acquisition, creation or disposal non-circulating assets organizations, classified like money flows from investment operations. Cash flows organizations from operations, associated with involving organization financing on debt or equity basis, leading to change magnitudes and structures capital and borrowed funds organizations, classified like money flows from financial operations |
6 | Representation streams cash funds from operating room activities (the form and content report about movement cash funds) | The company should submit traffic data Money from the operating room activities, using: - direct method, at which is revealed information about main types gross cash receipts and payments; - or indirect method in which profit or loss adjusted from taking into account the results operations non-monetary character, any deferred or assessed past or future cash receipts or payments on main activities and income items or expenses, related with admission or disposal of cash funds for investment or financial activities | Traffic report Money must separately indicate amounts net cash streams, linked in during the period from the operating room, investment and financial activities. In determining pure cash flow from the operating room activities recommended use direct method. But you can also use and indirect method (method recalculation) (see. In chapter "Terms and their definitions " definition direct and indirect method) | In PBU 23/2011 absent section, characterizing representation cash flows funds from operating room activities |
7 | Representation streams cash funds from investment and financial activities (representation streams cash funds for net method) | The company should apart submit main types gross cash receipts and gross cash payments, arising from investment and financial activities, with the exception of cash receipts and payments, data which are presented based offsetting. To such operations may, for example, relate: - acceptance and repayment of deposits poste restante bank; - rent, collected from the name of the owners property and transmitted to them; - cash receipts and payments for acceptance and payment deposits from fixed term of payments; - other | Separately not considered, but in illustrative parts in the report about movement Money apart are presented main types gross cash receipts and gross cash payments, arising from investment and financial activities | In PBU 23/2011 absent section, characterizing representation cash flows funds from investment and financial activities |
8 | Traffic cash funds in foreign currency | Cash flow funds, emerging in the result operations in foreign currency should reflected in functional organization currency by applying to the sum in foreign currency exchange course between functional and foreign currencies on the date emergence this movement Money. Unrealized profit and loss, arising in the result changes in exchange foreign courses currencies not are movement Money. Impact of changes exchange rate currencies for cash funds and equivalents Money appears to separately from cash flow funds from operating room, investment and financial activities and includes differences, if any, when representation data on receipts and payments of cash funds in reporting on exchange rates on the end of period | When conducting foreign exchange transactions company should reflect in the report on movement Money equivalent currency in which a report has been drawn up, using at recount exchange rates, acting on moment emergence cash streams. Instead exchange rates, acting on moment emergence cash streams can be used weighted averages exchange rates for this period. Influence changes exchange rates for leftovers cash funds, supported by in foreign currencies, in the report about movement Money indicated a separate line by article changes cash and equated to them funds for the period | Report indicators about movement Money organization reflected in currency of the Russian Federation - rubles. The amount of money flows in foreign currency recalculated in rubles for official course of this foreign currencies against the ruble, established The Bank of Russia on date implementation or receipts payment. Difference, emerging due with recalculation cash flows organizations and cash balances funds and cash equivalents in foreign currency at rates on different dates, reflected in traffic report Money separately from current, investment and financial cash flows organizations as impact of changes foreign course currencies by against the ruble |
9 | Percentage and dividends | Receipts and cash payments funds for received and paid out interest and dividends should open up apart. They have to be classified consistently from period in period how movements Money from the operating room, investment or financial activities. total amount percent, paid in during the period, is revealed in traffic report Money whatever from being recognized is she like an expense in profit or loss or capitalized in According to admissible alternative reflection method, permissible according to IFRS (IAS) 23 "Costs on loans ". Paid out interest, received interest and dividends can be classified how movement Money from the operating room activities, because they fall under definition profit or loss. At the same time paid interest and received interest and dividends can be classified respectively as cash flow funds from financial and investment activities, because they are costs to attract financial resources or income for investment | Paid out interest refer to operating room activities, and paid dividends are considered how financial activity. Received interest and dividends refer to operating room activities | To the current activities refers to: - payment interest on debt obligations, with the exception of percent, included in the cost investment assets underway in accordance with Regulation on accounting accounting "Accounting expenditures on loans and loans " (PBU 15/2008), approved By order of the Ministry of Finance Russia from 06.10.2008 N 107n (Further - PBU 15/2008); - admission interest on accounts receivable arrears buyers (customers). To cash flows from investment activities relate: - payment interest on debt obligations, included in the cost investment assets underway in accordance with PBU 15/2008; - dividends and similar proceeds from equity participation in others organizations; - receipts interest on debt financial investments, for exception acquired from the purpose of resale in the short perspective. To cash flows from financial activities payment concerns dividends and other payments on distribution profit in favor owners (participants) |
10 | Taxes on profit | Cash flows, arising in connection with tax on profit should open up separately and be classified like money flows from operating room activities if only they are not may be specifically linked with financial or investment activities | Taxes on profit relate to the operating room activities | Tax payments on profit like usually refer to the current activities organizations (for exception cases where income tax organizations directly associated with monetary streams from investment or financial operations) |
11 | Investment to subsidiaries companies, associated and joint company | When accounting investment in associated or subsidiary company, accounting in conducted by equity method participation or method accounting for cost price, investor limited to traffic report Money information about cash flow funds between yourself (investor) and object investment, eg dividends and in advance. Company, representing share report in jointly controlled organizations (see. IAS 31 "Participation in joint activity ") with using method proportional consolidation, includes in its consolidated reporting on cash flow their funds proportionate share of cash receipts and payments jointly controlled organizations. Company, representing share report using the method equity participation, includes in its traffic report Money cash receipts and payments related with her investments in jointly controlled organization, distribution and other payments or receipts between her and jointly controlled organization | A separate mentioning absent | Substantial cash flows organizations between her and economic societies or partnerships, are on relation to organization subsidiaries, dependent or main, reflected separately from similar cash flows between organization and other persons |
12 | Aggregate receipts and cash payments funds, arising in the result acquisitions and sales of subsidiaries companies and other structural units should introduce oneself separately and be classified as an investment activity | A separate mentioning absent | A separate mentioning absent |
|
13 | Non-monetary operations | Investment and financial operations not requiring use Money or their equivalents, should be excluded from reports on cash flows funds. Similar operations should open up in financial reporting such way that they provided all significant information about such investment and financial activities | Comments on report on movement Money should reflect information about the whole investment and financial activities during reporting period that influenced on assets and liabilities, but were not reflected on the move cash funds. In the report about movement Money indicated only cash part partially cash and partly non-monetary operations | A separate mentioning absent |
14 | Components cash funds and equivalents cash funds | The company should disclose the composition cash and their equivalents and submit reconciliation of amounts in her traffic report funds from equivalent articles represented in balance sheet | A separate mentioning absent | A separate mentioning absent |
15 | Other requirements to disclosure information | The company should reveal (together with comments manuals) amount available to her significant cash balances funds and equivalents Money, which are not available for use group | A separate mentioning absent | A separate mentioning absent |
The comparative table allows you to clearly see the differences between PBU 23/2011 and its international counterparts:
1. The purpose of the report. The purpose of drawing up a report in PBU 23/2011 is not formulated. This may be due, in particular, to the fact that the purpose of compiling Russian financial statements as a whole has not yet been formulated. Lack of goal-setting emasculates economic sense preparation of financial statements and a statement of cash flows including. The purpose and purpose of the report, formulated in IFRS and GAAP, on the one hand, are clearly focused on meeting the interests of a wide range of users, and on the other hand, they show the place of the cash flow statement in financial statements and the importance of cash flows for assessing the financial position of an organization and assessing the possibilities of its growth and development.
2. Scope of application. From the point of view of formal features, the scope of application of PBU 23/2011 coincides with foreign counterparts.
3. Presentation of the statement of cash flows and general provisions. In general, on this basis, there is also a formal coincidence with IFRS and GAAP. Here it is necessary to pay attention to the fact that the FAS 95 standard formulates the requirement for the mandatory reconciliation of the initial and final balances of cash and equivalent funds included in the Cash Flow Statement with the balance sheet data.
4. Mandatory inclusion in the financial statements. In PBU 23/2011, it is written that the cash flow statement is included in the accounting statements of the organization. IAS 7 and FAS 95 indicate the need for the mandatory inclusion of a cash flow statement in a complete set of financial statements (governed by these rules, principles and standards). As a result of the existence of this seemingly insignificant difference, at the present time, when forming a complete set of Russian financial statements, there is a possibility of not including this report in the complete set of Russian statements. An analysis of the documents showed that Russian legislation contains preconditions and direct instructions that make it possible to present to external users not a complete set, but only a balance sheet and a profit and loss statement. In the Orders of the Ministry of Finance of Russia, which since 1996 have regulated the composition and content of Russian financial statements, the wording has changed, in accordance with which the set of financial statements and the place in it of the cash flow statement were determined. So, in the Order of the Ministry of Finance of Russia of 12.11.1996 N 97 "On the annual financial statements of organizations" it is written:
"1. To approve for the presentation of annual financial statements by legal entities (except budgetary institutions, insurance organizations and banks) standard forms (Appendix 1 to this Order) and Instructions for filling them out (Appendix 2 to this Order).
- The composition of the annual financial statements includes:
a) Balance sheet - Form N 1;
b) Statement of financial results - form N 2;
c) explanations to balance sheet and the statement of financial results:
Capital flow statement - Form N 3;
Cash flow statement - form N 4;
Appendix to the balance sheet - Form No. 5;
explanatory note ".
In the Order of the Ministry of Finance of Russia dated January 13, 2000 N 4n "On the forms of financial statements of organizations", this wording is repeated and a parity listing of all the main forms of reporting is preserved. But in Order No. 67n it is already written that: "Included in the composition of the interim and annual financial statements, the Balance Sheet shall be considered form No. 1, the Profit and Loss Statement - Form No. 2. Included in the appendices to the balance sheet and the income statement of the accounting reporting, the Report on changes in capital shall be considered form No. 3, the Statement of cash flows - form No. 4, Appendix to the balance sheet - form No. 5, Report on the intended use of the funds received - form No. 6 ".
Thus, starting with the statements for 2004, the cash flow statement began to be interpreted as an appendix to the two main reporting forms. The same trend is observed in Order N 66n. Obviously, the concept of a mandatory set of financial statements, which is formulated in international standards, is gradually eroding.
This applies to small businesses (clause 3 of the Instructions on the volume of accounting forms approved by Order No. 67n) and open joint-stock companies (Order of the Ministry of Finance of Russia dated November 28, 1996 No. 101 "On the procedure for publishing financial statements by open joint-stock companies"). Based on these regulations, small businesses and open joint stock companies may not submit a cash flow statement (Form No. 4) in their financial statements. The exclusion of these documents from the financial statements means that external users do not get access to a large amount of information characterizing the change in the financial position of the organization, and therefore are deprived of the opportunity to get a complete picture of the financial position of the organization for the period. This approach has a negative impact on the amount of analytical information that is presented to external users for their management decisions.
5. Terms and definitions. Comparison of the standards shows that PBU 23/2011 reflects the main terms and their definitions, which must be operated in the process of drawing up a cash flow statement and analyzing cash flows from different types activities. However, the following aspects should be noted.
First, as in other Russian standards, PBU 23/2011 does not have a special section on terms and their definitions. In international standards (IFRS and GAAP), the content is clearly structured and each standard is provided with content, of which there is also a definition section. This is a very important methodological and systematic part of the work that improves the quality of standards.
Secondly, for the Russian standard it would be important, along with the listed terms, to also identify the concept of "cash". The importance of this circumstance is explained by the fact that the Russian financial statements, in accordance with Federal law on accounting, is formed on the basis of the Chart of Accounts. Therefore, all the problems that are inherent in this document, to one degree or another, are reflected in the methodology for constructing reporting indicators. These problems include:
- building a chart of accounts based on a mixed structure based on various classifications;
- formation of a chart of accounts based on synthetic accounting accounts, and not elements of financial statements;
- the presence of a large number of active-passive accounts and netting accounts for income and expenses;
- the presence of accounts, the construction of which violates such basic principles of financial accounting and preparation of financial statements as the principle of a continuously operating enterprise, the principle of prudence or conservatism;
- availability of synthetic accounts, which include various elements financial reporting.
In the current Russian Chart of Accounts, funds are located in section. 5 on synthetic accounts from the 50th to the 59th. The content of this section of the Chart of Accounts and its structure allow us to conclude that the composition of monetary funds in Russian accounting includes not only monetary assets, but also monetary documents, financial investments and reserves for impairment of investments in securities, which, being assets, are not money.
In the Chart of Accounts, the term "monetary documents" refers to documents, information about which is reflected in subaccount 50-3. In accordance with the Instructions for the application of the Chart of Accounts "on subaccount 50-3" Monetary documents ", postage stamps, stamps in the cashier of the organization are taken into account state duty, bills of exchange, paid air tickets and other monetary documents ".
Comparison of cash accounts shows that checks and letters of credit can be called cash documents rather than various types of stamps and other paid documents that are currently recorded in the Cashier account. This conclusion follows from the nature of these documents. Receipt- this is a written order of the payer to his bank to pay a certain amount from his account to the holder of the check. The most common distinction is between money checks and checking checks. Cash checks are used to pay the holder of the check cash in the bank, for example, for wages, household needs, travel expenses etc. Settlement checks are checks used for non-cash payments. Letter of credit(German akkreditiv - fiduciary) is a conditional monetary obligation of a bank, issued by it on behalf of the buyer in favor of the seller, according to which the bank that opened the account (issuing bank) can make payments to the seller or authorize another bank to make such payments if documents are available provided for in the letter of credit, and if other conditions of the letter of credit are met. Payments using a letter of credit are also called "payments by the drug system" (English letters of credit - letter of credit).
Comparison of checks and letters of credit with stamps and paid tickets shows a fundamental difference between these types of documents in terms of the purpose of their creation. Checks and letters of credit were originally created for direct exchange for money as documents used in various forms of cash settlements. Such an exchange does not lead to a loss of liquidity, and these assets, in fact, are the most liquid cash equivalents. Stamps, tickets and other paid documents are not intended to be exchanged for money, since they are purchased for a different purpose. As a rule, when selling tickets already purchased, part of their value is lost, and postage stamps are not at all intended for sale. Therefore, we can assume that the level of liquidity of these assets is highly questionable and clearly lower than that of cash and cash equivalents. The presence of such assets in the composition of cash can be considered an throwback, which came from the previous accounting system, which is still largely present in the current Chart of Accounts. It is obvious that the transfer of the "Cash Documents" subaccount from account 56 in the old Chart of Accounts to account 50 "Cashier" only exacerbated the existing contradiction that was in the old Chart of Accounts, since now stamps, tickets and similar documents are equated in the Russian Chart of Accounts with money and are endowed with absolute liquidity.
Financial investments, like monetary documents, do not generally refer to cash. However, in addition to the fact that financial investments in accordance with the Chart of Accounts are included in the composition of funds, to monetary assets included not only short-term financial investments, but also long-term financial investments, which are part of long-term assets and are reflected in the corresponding department of the balance sheet.
It should be noted that in accordance with IFRS and GAAP, cash includes cash equivalents, the definition of which is in PBU 23/2011. In international standards, these assets are linked to cash due to their high liquidity and low risk of its decline due to a short maturity. Therefore, cash equivalents in mandatory must join the funds, i.e. the assumption is made about their identity with money. This is supported by the fact that IAS 7 and FAS 95 use the phrase “cash and cash equivalents”.
In the Russian statement of cash flows effective from the 2011 financial statements, cash equivalents are not mentioned alongside cash. This raises the question: why is this concept introduced in PBU 23/2011 and what meaning does it carry?
You should also pay attention to the fact that GAAP includes among the terms "direct method" and "indirect method", which is mentioned in IFRS in Sec. 6 of the table "Presentation of cash flows from operating activities". These terms and the corresponding section are absent in PBU 23/2011. Definitions of direct and indirect methods are a necessary part of the standard, since they contain the methodology for determining net cash flow from operating activities. In sect. 7 of the table "Presentation of cash flows from operating activities" sets out the methods of generating in IFRS and GAAP net cash flow from investing and financing activities. These terms and their corresponding section are also absent in PBU 23/2011. It can be concluded that PBU 23/2011, which is called the "Statement of Cash Flows", does not mention how this report should be prepared.
8. Cash flow in foreign currency. Formally, this aspect of the standard corresponds to its international counterparts. However, it is obvious that the line "The magnitude of the impact of changes in the exchange rate of foreign currency against the ruble" in Form No. 4, in contrast to IFRS and GAAP, is moved outside the already defined net cash flow, a gap may form between the balance sheet data and the cash flow statement of Russian enterprises which contradicts international standards.
9. Interest and dividends. The most complete connection between interest and dividends with cash flows is disclosed in IFRS. It seems most important that IAS 7 shows the analytical function of transactions related to the receipt and payment of interest and dividends. It states that, although the nature of the payment of dividends is a financial transaction, it can also relate to cash flows from operating activities. This is done to ensure that investors are confident in the good financial position of the company, which can pay them dividends not only through financial activities - emissions, loans, but also through operating activities, which are the basis for the stability of the company and its development. It should be noted that in PBU 23/2011 from 2011 the payment of dividends to owners refers only to cash flows from financial activities.
10. Income taxes. Following IFRS PBU 23/2011, it is assumed that income tax cash flows should be disclosed separately and classified as operating cash flows, unless they can be specifically linked to financing or investing activities.
11. Investing in subsidiaries, associates and joint ventures. This aspect is practically not disclosed in PBU 23/2011. This may be due to the fact that such disclosure requires the introduction of such new elements into Russian accounting as the cost accounting method, the accounting method according to share participation, associates, proportionate consolidation, etc.
12. Acquisition and sale of subsidiaries and other structural units. There is no separate mention of such operations in PBU 23/2011.
13. Non-cash transactions. Non-cash transactions include "investment and financial operations that do not require the use of cash or cash equivalents "is recorded in IAS 7. Such transactions should be excluded from the statement of cash flows and should be disclosed in the financial statements in such a way that they provide all relevant information about such investing and financing activities. (therefore, in the schema of the cash flow statement, which is prepared in accordance with IFRS, these transactions are shown in the note).
There is no separate mention of such operations in PBU 23/2011. However, it seems that this is a very important aspect that requires separate disclosure. This is currently especially important for Russian enterprises. This is due to the fact that in Russian practice, non-monetary, as a rule, include barter transactions related to operating activities. Obviously, the classification of only investment and financial transactions as non-cash transactions indicates that international standards indicate the need to conduct operating activities only using cash transactions associated with the direct movement of cash flows.
14. Components of cash and cash equivalents. There is no separate mention of this aspect in PBU 23/2011. This section of IAS 7 emphasizes the need to disclose the composition of cash and cash equivalents, as well as the need to present a reconciliation of the amounts in the statement of cash flows with the corresponding balance sheet items, which has already been discussed.
15. Other Disclosure Requirements. There is no separate mention of this aspect in PBU 23/2011. In this section, in IAS 7, an entity is required to disclose (together with a management commentary) the amount of significant cash and cash equivalent balances held by the entity that are not available for use by the group. The standard provides examples of this requirement. An example related to information disclosure could also be given. In accounting, there is the concept of "irreducible balance of funds" (in GAAP these funds are called "compensation balance"). Since these funds are temporarily withdrawn from circulation and immobilized, their liquidity is reduced, which must be taken into account when assessing the real liquidity of balance sheet assets. For this purpose, cash flow statements prepared in accordance with international standards show cash and cash equivalents and temporarily immobilized cash balances as a separate line, which undoubtedly increases the analytical capabilities of users.
The analysis shows that PBU 23/2011, firstly, needs to be finalized and supplemented, and secondly, Russian enterprises should still use IAS 7 and the Financial Reporting Principles approved by the IASB in 1989 for systematic financial reporting.
Bibliography
- Williams J. The Commentary GAAP Handbook. M .: Infra-M, 1998.149 p.
- International Financial Reporting Standard (IAS) 7 "Statement of Cash Flows". URL: http://allmsfo.ru/msfo-ias-7.html.
- On the annual financial statements of organizations: Order of the Ministry of Finance of Russia dated 12.11.1996 N 97.
- On the forms of financial statements of organizations: Order of the Ministry of Finance of Russia dated 01.13.2000 N 4n.
- On the forms of financial statements of organizations: Order of the Ministry of Finance of Russia dated July 22, 2003 N 67n.
- On the forms of financial statements of organizations: Order of the Ministry of Finance of Russia dated 02.07.2010 N 66n.
- On approval of the Accounting Regulations "Statement of Cash Flows" (PBU 23/2011): Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n.
- Financial newspaper. 2003. N 30.
- GAAP 2007 Interpretation and Application of Generally Accepted Accounting Principles. Barry J. Epstein, Ralph Nach, Steven M. Bragg.
M.E. Gracheva
Department of Economic Analysis
Financial University
under the Government of the Russian Federation