PBU 23 11 brief description. Accounting "cash flow statement"
On March 29, 2011, a new PBU "Traffic Report" Money" , approved by Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n. This is absolutely new document, which had no analogues among PBUs before. However, its similarity is the International Standard financial statements IAS 7 (IAS 7 Statements of Cash Flows).
This Regulation applies to report on in cases where the preparation, presentation and (or) publication of this report are 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 Accounting Regulations and financial 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 on the date of payment or receipt. If there is a minor change in the official exchange rate foreign currency to the ruble, conversion can be made at the average rate calculated for a month or a shorter period. The cash flow statement is a summary of data about cash as well as highly liquid financial investments. The latter may include, for example, demand deposits opened in credit institutions. Highly liquid financial investments- these are cash equivalents that can be easily converted into advance a known amount cash and are subject to an insignificant risk of changes in value (hereinafter referred to as cash equivalents) (clause 5 of PBU 23/2011).
Let us give another definition, widely used in the commented PBU. Cash flows are payments to the organization and receipts of cash and cash equivalents to the organization.
Cash flows are not:
- payments of funds associated with investing them in cash equivalents, and vice versa, receipts of funds from the redemption of cash equivalents (except for accrued interest);
- foreign exchange transactions (excluding losses or benefits from the transaction);
- exchange of some cash equivalents for other cash equivalents (excluding losses or benefits from the transaction);
- 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 involved cash flows, as well as 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 operations (clauses 7, 8 of PBU 23/2011).
Cash flows from current operations. These are cash flows from operations related to the implementation ordinary activities revenue-generating organization. Clause 9 provides examples of such cash flows:
a) receipts from the sale of products and goods to buyers (customers), performance of work, provision of services;
b) receipts of rental payments, royalties, commissions and other similar payments;
c) payments to suppliers (contractors) for raw materials, materials, work, services;
d) remuneration of the organization’s employees;
e) payment of corporate income tax;
f) payment of interest on debt obligations, with the exception of interest included in the price investment assets;
g) receipt of interest on accounts receivable buyers (customers);
h) cash flows on financial investments acquired for the purpose of resale in the short term (usually 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 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 PBU 15/2008;
c) proceeds 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 purchased (acquired) for the purpose of resale in the short term;
e) provision (repayment) 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 from other persons), with the exception of financial investments purchased (acquired) for the purpose of resale in the short term;
g) dividends and similar income from equity participation in other organizations;
h) receipts 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 the organization’s attraction of financing on a debt or equity basis, leading to changes in the size and structure of capital and borrowed money organizations (clause 11 of PBU 23/2011), first of all:
A) cash deposits owners (participants), proceeds from the issue of shares, increase in participation shares;
b) payments to owners (participants) in connection with the repurchase of shares (participatory interests) of the organization from them or their withdrawal from the membership;
c) payment of dividends and other payments for the distribution of profits in favor of the owners (participants);
d) proceeds from the issue of bonds, bills and other debt securities;
e) payments in connection with the redemption (redemption) of bills and other debt securities;
f) receiving 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 transaction can relate to different types of cash flows (for example, the payment of interest is a cash flow from current operations, and the return of the principal is a cash flow from financial transactions, but when repaying a loan in cash, both of these parts can be paid in one amount) - in this case, the organization divides the single amount into appropriate parts, followed by separate classification of cash flows and their separate reflection in the cash flow statement (clause 13 of PBU 23/2011).
Clauses 16 and 17 of PBU 23/2011 provide examples when an organization’s cash flows are reflected in the cash flow statement on a collapsed 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 corresponding payments to other persons, for example:
- cash flows of the commission agent or agent in connection with the commission or agency services(excluding fees for the services themselves);
- indirect taxes as part of receipts from buyers and customers, payments to suppliers and contractors and payments to budget system RF or compensation from it;
- receipts from the counterparty for reimbursement of utility bills and making these payments in rental and other similar relationships;
- payment for transportation of goods with receipt of equivalent compensation from the counterparty.
The main criterion indicating that payments to an organization (receipts to the organization) are subject to a reduced reflection is the lack of connection between cash flows and the main activities of the enterprise. The purpose of the relevant report data is to show users of the financial statements the level of the organization's cash supply (cash flows from current operations), the level of expenses incurred for the acquisition or creation of non-current assets (cash flows from investment operations), to provide a basis for forecasting 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” the report with “unnecessary” information. At the same time, in the author’s opinion, it would not be a mistake to indicate the controversial cash flows in detail.
Secondly, when they are characterized by rapid turnover, large sums and short return periods, for example:
- mutually determined payments and receipts for settlements using bank cards;
- purchase and resale of financial investments;
- making short-term (usually up to three months) financial investments using borrowed funds.
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 PBU 3/2006 “Accounting for assets and liabilities, the value of which is expressed in foreign currency.” The difference arising in connection with the recalculation of the organization's cash flows and cash balances and cash equivalents in foreign currencies at rates for different dates is reflected in the report separately from the organization's current, investment and financial cash flows as the impact of changes in the foreign currency exchange rate against the ruble ( clause 19 of 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 must be disclosed on the approaches used to separate cash equivalents from other financial investments, to convert cash flows in foreign currencies into rubles, for a collapsed presentation of cash flows, as well as other explanations necessary to understand the information presented in the report on cash flow (clause 23 of PBU 23/2011). The organization discloses as of reporting date opportunities to attract additional funds, for example, amounts opened but not used by it credit lines, the amount of funds that can be received on overdraft terms, the amount of loans not received as of the reporting date, etc. In addition, the following are disclosed (taking into account materiality): available amounts of cash (or their equivalents) that are not available for use (for example, letters of credit opened in favor of other organizations for transactions not completed at the reporting date), cash flows from current, investment and financial transactions for each reportable segment (determined in accordance with PBU 12/2010 “Information by segments”), etc. Then In addition to filling out the report itself, the accountant will also need to work on the explanation for it.
Ministry of Finance of the Russian Federation
ORDER
ON APPROVAL OF THE REGULATIONS
ON ACCOUNTING "CASH FLOW STATEMENT"
(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 Decree 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. Approve the attached Regulations on accounting"Cash Flow Statement" (PBU 23/2011).
2. Establish that this Order comes into force starting from the financial statements for 2011.
Deputy
Chairman of the Government
Russian Federation -
Minister of Finance
Russian Federation
A.L.KUDRIN
Approved
By order of the Ministry of Finance
Russian Federation
dated 02.02.2011 N 11n
Accounting Regulations "Cash Flow Statement" (PBU 23/2011)
I. General provisions
1. These Regulations establish the rules for drawing up cash flow statements by commercial organizations (with the exception of credit organizations) that are legal entities under the laws of the Russian Federation (hereinafter referred to as organizations).
2. These Regulations apply to the preparation of a cash flow statement in cases where the preparation, and (or) presentation, and (or) publication of this report are provided for by the legislation of the Russian Federation or regulations, and also when the organization voluntarily decided to submit and (or) publication of such a report.
This Regulation does not apply when compiling an organization’s reporting for internal purposes, reporting compiled for state statistical observation, reporting information submitted credit organization in accordance with its requirements, and reporting information for other special purposes, if the rules for drawing up such reporting and information do not provide for the application of these Regulations.
3. The cash flow statement is part of the organization’s financial statements.
4. The 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 these Regulations.
5. The cash flow statement is a summary of data on cash, as well as highly liquid financial investments that can be easily converted into a known amount of cash and which are subject to an insignificant risk of changes in value (hereinafter referred to as cash equivalents). Cash equivalents may include, for example, demand deposits opened with credit institutions.
6. The cash flow statement reflects the organization’s payments and receipts of cash and cash equivalents to the organization (hereinafter referred to as the organization’s cash flows), as well as the 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 related to their investment in cash equivalents;
b) cash receipts from the repayment of cash equivalents (excluding accrued interest);
c) foreign exchange transactions (excluding losses or benefits from the transaction);
d) exchange of some cash equivalents for other cash equivalents (excluding losses or benefits from the transaction);
e) other similar payments to 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 dated February 2, 2011 No. 11n “On approval of the Accounting Regulations “Cash Flow Statement” (PBU 23/2011)” was registered with the Ministry of Justice on March 23, 2011.
The regulation establishes that the cash flow statement reflects the organization's payments and receipts of cash (flows), as well as fund balances at the beginning and end of the reporting period. Clause 6 of Part 1 of the Regulations lists those payments and receipts that are not cash flows.
An organization's cash flows show the organization's level of cash flow sufficient to repay loans, maintain operations, etc. without attracting external finance.
The organization's cash flows are reflected in the cash flow statement, subdivided into cash flows from current, investing and financial operations.
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, compensation of employees, 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.
Flows from financial transactions include cash deposits of owners (participants), proceeds from the issue of shares, increases in participation interests, payments to owners (participants) in connection with the repurchase of shares (participatory interests) of the organization from them or their withdrawal from membership, receipt of loans and borrowings from other persons, etc. They can be found in clause 11, part 2 of the document.
All significant cash flows are reflected in the report. They can be reflected in aggregate in cases where they characterize not so much the activities of the organization as the activities of its counterparties, when receipts from some persons determine corresponding payments to other persons, and also when they are characterized by rapid turnover, large amounts and short repayment periods.
All indicators must be presented in rubles. Flows in foreign currency are converted into rubles at the exchange rate on the day of receipt or payment.
The difference arising in connection with the recalculation of the organization's cash flows and balances in foreign currency at rates on different dates is reflected in the cash flow statement separately from the rest as the impact of changes in the foreign currency exchange rate against the ruble. Cash flows associated with the activities of subsidiaries are also reflected separately.
The presence of additional explanations is accompanied by a link in the corresponding article.
Clause 24, Part 4 of the Regulations 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 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 more and more important and relevant in the development of a new accounting methodology that is adequate to the conditions of globalization and integration. The introduction of International Financial Reporting Standards (IFRS) is a critical step to create a favorable investment climate and, accordingly, financial growth.
Currently, the convergence of Russian accounting regulations (RAP) with International Financial Reporting Standards (IFRS) is being carried out. One of the proofs of this is the appearance of PBU 23/2011, which is an analogue of IFRS 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 There is now order in how to reflect cash and its flows in the cash flow statement. PBU 23/2011 is mainly aimed at a detailed disclosure of the concepts and principles of classification of cash flows. However, unlike IAS 7, it does not contain 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 known amounts of cash and are subject to an insignificant risk of changes in their value, while PBU 23/2011 does not distinguish between the urgency of financial investments .
According to the classification of cash flows, investments of funds in other objects for a period of up to 1 year are classified as short-term cash flow, for a period of more than 1 year - to long-term cash flow. It should also be taken into account that the adoption of a period of 1 year as a criterion for dividing cash flows by their duration is conditional.
An accountant, in accordance with PBU 23/2011, as a result of applying his professional judgment, can classify both short-term and long-term financial investments as cash equivalents. The latter, in turn, contradict one of the conditions for recognizing financial investments as cash equivalents, namely, financial investments must 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 a financial investment in the long term due to the fact that changes in value may be associated with uncontrollable and unforeseen external events. In addition, classifying long-term financial investments as cash equivalents will understate the balance of cash flows from investment operations.
In other words, the organization’s activity in investment activities decreases, since it is through investment activities that debt liabilities are taken into account securities(the right to claim funds from other persons), with the exception of financial investments acquired for the purpose of resale in the short term. But on the other hand, the reclassification of long-term financial investments into cash equivalents will have an impact on the change in the solvency of the organization, on which creditors focus their attention. Thus, the current, quick and absolute liquidity ratios will be overestimated.
As a result of classifying short-term or long-term financial investments as cash equivalents in accordance with PBU 23/2011, reclassification occurs in the items of current assets or in the items of current assets and non-current assets, respectively. The amount of cash and cash equivalents increases, which as a result leads to an overestimation of solvency and liquidity indicators.
Having analyzed the above differences, we can conclude that the Russian standard provides considerable freedom for the accountant to use his professional judgment when classifying financial investments as cash equivalents. A definition of cash equivalents according to IFRS is more accurate and specific, since only short-term financial investments can be classified as such.
However, according to IAS 7, an accountant may have questions related to the term “investments” (in RAS the term “financial investments” is used). 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 the concept of “cash flows from current operations.”
In IAS 7, the definition of operating activities is stated briefly and quite clearly, that is, the accountant, having decided which transactions he classifies as investing and financial activities, all other operations related to the main income-generating activities and other activities are classified as operating activities.
The situation is completely different in RAS, which provides the definition of “cash flows from current operations.” In accordance with this definition, cash flows from current operations can include cash flows from ordinary activities that generate revenue. In addition, there is the following addition to this definition: cash flows from current operations are usually associated with the formation of 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 IFRS (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 trading purposes, while according to PBU 23/2011 cash flows from current operations include, for example:
payment of interest on debt obligations, with the exception of interest included in the cost of investment assets;
receipt of interest on accounts receivable from buyers (customers);
The second characteristic feature associated with the cash flows of insurance organizations is that the cash receipts and payments of the insurance company for insurance premiums, claims, annuities and other insurance benefits are given in 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 commercial organizations carrying out specific types of activities (in this case, insurance organizations) have their own regulatory framework.
There is also a difference in the qualification of interest received. IAS 7 allows interest received to be classified as both operating and investing activities, depending on the accountant's professional judgment. An accountant can classify interest income as the first type, based on the fact that these incomes are included in the definition of profit, and as 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 satisfies the definitions of the relevant types of activity given in IAS 7. When choosing to attribute these incomes to investing activities, the balance of cash flows from operating activities and the negative balance of cash flows from investing activities will be underestimated, which is an unfavorable indicator of the enterprise’s activity for users of financial statements.
Accounting Regulation 23/2011 classifies income from interest on debt financial investments, with the exception of those acquired for resale in the short term, as cash flows from investment transactions. Attributing interest received on financial investments to the organization's investment operations 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 greater scope for the accountant to use his or her professional judgment in classifying interest received as a cash flow.
There are also differences in the definition of investment activity. Firstly, it should be noted that PBU 23/2011 does not define investment activities specifically, but uses such a concept as “cash flows from investment operations” (as was described in the case of operating activities). Secondly, in accordance with RAPK, cash flows from investment operations can only include operations 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 the same activities may include other investments that the accountant, in his professional judgment, does not classified as cash equivalents.
Therefore, short-term investments can also be classified as investment activities, since cash equivalents according to 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. In relation to investing activities, IFRS also gives the accountant more scope to exercise his or her professional judgment, which is consistent with the examples listed in IAS 7 related to investment activities.
There are also differences in the guidelines on how to prepare a cash flow statement. In accordance with IFRS (IAS) 7, the cash flow statement in terms of reflecting cash flows from operating activities can be prepared using the direct and indirect method. The direct method, in turn, is also divided into two options for compilation: information is taken from accounting records or the amounts of revenue, cost and other items of the statement of comprehensive income are adjusted (in RAP - the statement of financial results). The cash flow statement in terms of reflecting investing and financing activities is prepared only by the direct method. In accordance with the approved form of the cash flow statement in RAS, it is compiled using the direct method.
It should be noted that when using one or another type and method of calculating cash flow, it should be remembered that a number of problems can reduce its information value.
The structure and composition of cash flow statement indicators in accordance with PBU 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 counterparts.
Table 1.4
Structure and composition of cash flow statement indicators
Name |
||
Presentation of cash flows from investing activities |
In accordance with clause 10, this is the movement of money in transactions related to the acquisition, creation or disposal of non-current assets of the company; information on cash flows from investment transactions shows users of the organization’s financial statements the level of the organization’s expenses incurred for the acquisition or creation of non-current assets that provide cash receipts in future. |
Investment activities - the acquisition and sale of long-term assets and other investments that are not cash equivalents (clause 6 of IFRS 7). IFRS 7 does not include investments that represent cash equivalents as part of investing activities. In accordance with clause 7 of IFRS 7, an investment, in order to qualify as a cash equivalent, must be readily convertible into a certain amount of cash, and be subject to an insignificant risk of changes in value (clause 15 of IFRS 7). |
Presentation of cash flows from financing activities |
In accordance with clause 11, the movement of money from operations related to raising financing on a debt or equity basis, leading to a change in the size and structure of the company’s capital and borrowed funds. Information about cash flows from financial transactions provides the basis for forecasting the claims of creditors and shareholders (participants) in relation to the organization's future cash flows, as well as the organization's future needs for raising debt and equity financing, cash flows from financial activities |
Bank borrowings are generally considered to be a financing activity. However, if bank overdrafts If refundable on demand form an integral part of the company's cash management, they are included as a component of cash and cash equivalents (clause 8 of IFRS 7). |
Presentation of cash flows from operating activities |
In accordance with paragraph 9, this is an activity related to the implementation of the usual details of the organization that generates revenue. An organization's cash flows from current operations are usually associated with the formation of the organization's profit (loss) from sales. |
An entity must present cash flows from operating activities using either the direct method or the indirect method (paragraph 18 of IFRS 7). |
Possibility of using the net method |
In accordance with clause 16, cash flows are reflected in a collapsed manner 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 corresponding payments to other persons. In accordance with clause 17, cash flows are reflected in a collapsed manner when cash flows are distinguished by rapid 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 cash flow statement in a net valuation:
|
Disclosure of information on payment of dividends |
In accordance with clause 9, information on cash flows from current operations shows users of the organization’s financial statements the level of the organization’s provision with funds sufficient 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 entity's financial statements, provides the 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 costs of attracting financial resources. However, to assist users in determining a company's ability to pay dividends from operating cash flows, dividends paid may be classified as a component of cash flows from operating activities. |
Disclosure of information on income tax payments |
In accordance with clause 9 (subclause d) as part of current activities (except for cases where corporate income tax is directly related to cash flows from investment or financial transactions). |
Cash flows arising in connection with income taxes must be disclosed separately and classified as cash flows from operating (current) activities, unless they can be specifically linked to financing or investing activities (clauses 35, 36 of IFRS 7). |
Disclosure of funds not available for use |
In accordance with paragraph 25, the organization discloses, taking into account materiality, the following information: a) available significant 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 for unfinished funds at the reporting date date of transactions) indicating the reasons for these restrictions. |
In accordance with paragraph 48 of IFRS 7, an entity must disclose, together with management's commentary, the amount of significant cash balances and cash equivalents that it has but is not available for use. |
Chapter 1 Conclusions
Cash is the financial resources of an organization, the most highly liquid assets that can ensure the fulfillment of obligations of any level and type. The timeliness of repayment depends on their availability. accounts payable organizations.
Functions of cash; medium of exchange, measure of value, means of accumulation, means of payment and world money.
The main regulatory document regulating new order conducting cash transactions, is the Directive of the Bank of Russia dated March 11, 2014 No. 3210-U “On the procedure for conducting cash transactions legal entities and a simplified procedure for conducting cash transactions by individual entrepreneurs and small businesses,” which came into force on June 4, 2014. According to the new order, for individual entrepreneurs and small businesses (small enterprises) the limit on the amount of cash in the cash register has been lifted. The limit rule remains only for organizations that are not small businesses. In the conditions of recognition of IFRS as official on the territory of the Russian Federation, there is a need to analyze the provisions Russian situation on accounting PBU 23/2011 with its international analogue IFRS (IAS) 7 “Cash Flow Statement”. A comparative description of the above 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 according to Russian and international rules. International Financial Reporting Standard (IAS) 7 provides greater scope for the accountant to use his or her professional judgment in generating cash flows.
"International Accounting", 2011, N 33
The article compares the Accounting Regulations “Cash Flow Statement” (PBU 23/2011), approved by Order of the Ministry of Finance of Russia dated 02.02.2011 N 11n, with similar international standards GAAP and IFRS. This comparison is interesting for theoretical scientific research and the practical application of this regulatory document, which is necessary for the correct and consistent preparation of the cash flow statement as part of the financial statements.
Standards in the system financial accounting are developed for accounting and compilation financial reports. These are regulatory documents, the provisions of which must be taken into account by developers of various guidelines regulating the completeness, structure and content of financial statements.
Brief history of the issue. The cash flow statement has been included in the financial statements of Russian enterprises since reporting for 1997. Over the 14 years that have passed since then, great changes have occurred and a lot of work has been done in the field of building a new system of Russian financial accounting and financial reporting. Starting with the reporting for 2004, the Russian Ministry of Finance allowed the use of International Financial Reporting Standard (IFRS) (IAS) 7 “Cash Flow Statement” when preparing the report. This was due to the lack of a national standard, which was developed only in 2011. Currently, the cash flow statement must be filled out in accordance with Order of the Ministry of Finance of Russia dated July 2, 2010 N 66n “On forms of financial statements of organizations” (hereinafter referred to as Order N 66n ) (Table 1).
Table 1
Cash flow statement for _________ 20__.
First of all, it is necessary to pay attention to the change in terminology that has been used in the cash flow statement since 2011. In accordance with Order of the Ministry of Finance of Russia dated July 22, 2003 N 67n “On the forms of financial statements of organizations” (hereinafter referred to as Order N 67n) in form N 4, the term “net increase (decrease) in cash” was used to denote net cash flow. Starting from reporting for 2011, in accordance with Order No. 66n, the term “result of cash flow” is used for this purpose.
Moreover, comparison new form report with the form that should have been submitted in accordance with Order No. 67n shows that there has been another convergence of Form No. 4 with IFRS, while maintaining 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 a diagram of the cash flow statement, which should be prepared in accordance with IFRS using the direct method:
Sample cash flow statement (IFRS 7)
Cash Flowfrom operating activities <*>:
Receipts x
Retirement (x)
Net cash flow from operating activities xxx
Cash Flow
from investment activities:
Receipts x
Retirement (x)
Net cash flow from investing activities xxx
Flow of funds
from financial activities:
Receipts x
Retirement (x)
Net cash flow from financing activities xxx
The impact of exchange rate changes on cash and
equivalents
Net change in cash and cash equivalents xxx
Cash and cash equivalents at beginning x
period
Cash and cash equivalents at end x
period <*>In international terminology, current activities are called operating activities.
Note on the report. The list of all monetary transactions investment and financial nature during the period...
As a convergence with IFRS, we can note the fact that starting with the reporting for 2011 in Form N 4 of the Russian financial statements, as in IFRS, cash balances at the beginning and end of the period are joined together at the end of the report. In international standards, this report structure is explained by the need to reconcile the opening and closing 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, by adding (algebraically) to the total net cash flow the cash balance at the beginning of the period, the preparer will always obtain the cash balance at the end of the period. When drawing up a report in accordance with RAS, the use of such a scheme for a large number of enterprises will immediately reveal the difference between the data of forms 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 magnitude of the impact of changes in the exchange rate of foreign currency against the ruble” in Form No. 4, unlike IFRS, is moved beyond the already determined net cash flow. Due to this circumstance, for such enterprises the amount indicated on this line always distorts the balance and turnover in the Russian cash flow statement and leads to a gap with the balance sheet.
It should also be noted that, in accordance with IFRS, the cash flow statement for operating activities can be prepared using both the direct and indirect method, while the Russian report is supposed to be prepared only by the direct method, as can be seen from its structure.
Considering that Russian financial accounting is being reformed in accordance with IFRS, the article uses these standards as the basis for comparing and contrasting Russian regulations and reporting practices. However, it is known that both the cash flow statement format and the standard dedicated to it were originally developed in the US GAAP system (Generally Accepted Accounting Principles, US GAAP - a system of financial accounting standards and principles used in the United States). It is from this system that IFRS took all the basic principles and rules for reporting. In this regard, a comparison of the Accounting Regulations “Cash Flow Statement” (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 other regulatory documents RAS is produced not only with IAS 7, but also with GAAP (FAS 95), which allows for a more in-depth analysis. It should be noted that GAAP also uses FAS 102 "Statement of Cash Flows - Exceptions for Certain Entities and Classification of Cash Flows from Certain Classes of Securities Acquired for Resale" and FAS 104 "Statement of Cash Flows" to prepare the statement of cash flows. on cash flows - a statement of net cash receipts and payments for certain transactions and the classification of funds in hedging transactions" (Table 2).
table 2
Comparative characteristics of the main provisions of the standards devoted to the preparation of cash flow statements
N p/p | Provisions standard | IAS 7 | GAAP (FAS 95) | RAS (PBU 23/2011) |
1 | Target | The purpose of this standard is requirement providing information about historical changes in cash and equivalents Money companies through traffic reports Money. Information about cash flow company funds is useful because it gives users financial reporting basis for rate capabilities create companies cash and their equivalents, her needs for monetary means. Economic solutions, accepted by users require assessment capabilities create companies cash and their equivalents, distributions in time and their certainty creation | Report data help estimate: 1. Ability enterprises provide in future excess tributaries Money over their outflow. 2. Ability enterprises answer by his obligations, pay dividends and satisfy all needs in the external financing. 3. Reasons discrepancies between pure profit and pure monetary flow. 4. Influence investment and financial activities on financial position enterprises | The goal is not formulated |
2 | Sphere applications | This standard demands from everyone companies representation traffic report Money, because monetary facilities any are needed companies regardless its specifics activities | Traffic report Money must be included in quality component in full set financial reporting any enterprises (with the exception of non-profit organizations) | PBU 23/2011 sets rules drawing up traffic report Money commercial organizations (with the exception of credit organizations), being legal persons according to legislation RF. PBU 23/2011 not applicable when compiling reporting organizations for internal goals, reporting, compiled for state statistical observations, reporting information, represented credit organizations in in accordance with its requirements, and reporting information for other special goals, if in rules drawing up such reporting and no information provided application PBU 23/2011 |
3 | Performance report on movement monetary funds and general provisions | Traffic report Money must introduce traffic data Money during the period, classifying them in the operating room, investment or financial activities. Company is traffic data Money from the operating room, investment or financial activities, because it's more corresponds her character activities. One same operation may include receipts and cash payments funds, classified differently | Traffic report Money should reflect net values monetary streams, educated during reporting period during operating room, investment and financial activities organizations. Coordination primary and final leftovers monetary and equivalent funds for them included in Traffic report Money | Traffic report Money compiled on based on general requirements for accounting reporting organizations, established normative legal acts in accounting accounting, and requirements, established PBU 23/2011. Cash flows organizations are divided into cash flows from current investment and financial operations. Cash flows organizations classified depending on the character operations, with which they related as well depending on how way information about them is used for decision making by users accounting reporting organizations |
4 | Mandatory inclusion in compound financial reporting | The company is obliged prepare a report on cash flow funds according with requirements present standard and present it to as a component part of its financial reporting for every period, in which introduced herself financial reporting | Traffic report Money Necessarily must be included as component in full general set financial reporting for external users any enterprises | Traffic report Money included in accounting reporting organizations |
5 | Terms and their definitions | Cash facilities - include money in at the checkout and at the current company account. Equivalent Money - short-term, highly liquid investments, easy reversible in known in advance amount of money funds and exposed insignificant risk of change their cost. Cash movement funds - receipts and cash payments funds and their equivalents. operating room activity - main revenue-generating activity companies and others activity, different from investment and financial activities. Investment activity - acquisition and sale long-term assets and other investments, not related to monetary equivalents. Financial activity - activity, which leads to changes in size and composition own capital and debt company funds | Cash equivalents - highly liquid investments, which: - can be exchanged for a known amount monetary funds; - maturity which are 3 months. or less to maturity dates and have minor risk of change cost due to changes interest rates. Direct method - method which allows define net cash flow from operating room activities for transaction account, related to monetary receipts and payments, not related to net profit. Financial activity - operations companies, related with purchase and sale capital (borrowing, sale of shares, debt payment etc.). Indirect method - method, which allows define net cash flow from operating room activities for check adjustments net profit, received for income account and expenses, not related to monetary operations. Investment activity - operations companies, Related investments in long-term assets (purchase and sale buildings, structures, equipment etc.). operating room activity - operations, not related to investment and financial activities, mostly Related production products or services | Traffic report Money is is a generalization data on monetary means and highly liquid financial investments, which can be easy addressed to known in advance amount of money funds that susceptible insignificant risk of change cost (hereinafter referred to as monetary equivalents). Cash flows organizations from operations, related to implementation ordinary activities organizations, bringing revenue, classified like cash flows from current operations. Cash flows from current operations like usually related with the formation profit (loss) organizations from sales Cash flows organizations from operations, related with the purchase, creation or disposal non-current assets organizations, classified like cash streams from investment operations. Cash flows organizations from operations, related to involving organization financing on debt or on a shared basis, leading to change quantities and structures capital and borrowed funds organizations, classified like cash streams from financial operations |
6 | Performance streams monetary funds from operating room activities (form and content report about the movement monetary funds) | The company must introduce traffic data Money from the operating room activities, using: - direct method, at which reveals itself information about main types gross cash income and payments; - either indirect method in which profit or loss adjusted from taking into account the results operations non-monetary character, any postponed or accrued past or future cash income or payments for basic activities and income items or expenses, related with admission or cash outflow funds for investment or financial activities | Traffic report Money must separately indicate amounts net cash streams, related in during the period from the operating room, investment and financial activities. When determining pure cash flow from the operating room activities recommended use direct method. But it is also possible use and indirect method (method recalculation) (see In chapter "Terms and their definitions" definition direct and indirect method) | In PBU 23/2011 absent chapter, characterizing performance cash flows funds from operating room activities |
7 | Performance streams monetary funds from investment and financial activities (performance streams monetary funds for net method) | The company must apart introduce main types gross cash income and gross cash payments, arising from investment and financial activities, with the exception of monetary income and payments, data which introduce themselves based offset. To such operations may, for example, relate: - acceptance and repayment of deposits poste restante jar; - rent, collected from owners name property and transmitted by him; - cash receipts and payments for acceptance and payment deposits from fixed payment terms; - and others | Not separately is being considered but in illustrative parts in the report about the movement Money apart introduce themselves main types gross cash income and gross cash payments, arising from investment and financial activities | In PBU 23/2011 absent chapter, characterizing performance cash flows funds from investment and financial activities |
8 | Movement monetary funds in foreign currency | Cash movement funds, arising in result operations in foreign currency, should reflected in functional organization currency by applying to the amount in foreign currency exchange exchange rate between functional and foreign currencies as of date emergence of this movement Money. Unrealized profit and loss, arising in result exchange changes foreign courses currencies, not are a movement Money. Impact of changes exchange rate currencies to cash facilities and equivalents Money seems separately from cash flows funds from operating room, investment and financial activities and includes differences, if they exist, when representation data about receipts and cash payments funds in reporting on exchange rates on end of period | When conducting currency transactions company should reflect in the report on movement Money equivalent currencies, in which a report has been compiled using when recalculation exchange rates, acting on moment emergence monetary streams. Instead of exchange rates, operating on moment emergence monetary flows may be used weighted average exchange rates for now period. Influence changes exchange rates for leftovers monetary funds, supported in foreign currencies, in the report about the movement Money indicated separate line by article changes monetary and equivalent funds for them during the period | Report Indicators about the movement Money organizations reflected in currency of the Russian Federation - rubles Amount of cash flows in foreign currency recalculated in rubles by official this course foreign currency to ruble, installed Bank of Russia on date implementation or receipts payment. Difference, emerging due with recalculation cash flows organizations and cash balances funds and monetary equivalents in foreign currency at rates on different dates, reflected in traffic report Money separately from current, investment and financial cash flows organizations like impact of changes foreign course currencies by against the ruble |
9 | Percentage and dividends | Receipts and cash payments funds in connection with received and paid interest and dividends should open up apart. They have to be classified sequentially from period to period how to move Money from the operating room, investment or financial activities. total amount percent, paid in during the period reveals itself in traffic report Money regardless from being recognized is it an expense? in profit or loss or capitalized in According to acceptable alternative reflection method, resolvable according to IFRS (IAS) 23 "Costs on loans." Paid interest, received interest and dividends can be classified like 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 interest refer to operating room activities, and paid dividends are being considered as financial activity. Received interest and dividends refer to operating room activities | To current activities applies: - payment percent on debt obligations, with the exception of percent, included in price investment assets being maintained in accordance with Regulations on accounting accounting "Accounting expenses for loans and loans" (PBU 15/2008), approved By order of the Ministry of Finance from Russia 06.10.2008 N 107n (Further - PBU 15/2008); - admission percent on accounts receivable debt buyers (customers). To money flows from investment activities relate: - payment percent on debt obligations, included in price investment assets being maintained in accordance with PBU 15/2008; - dividends and similar proceeds from equity participation in others organizations; - receipts percent on debt financial investments, for except purchased from for the purpose of resale in the short term perspective. To money flows from financial activities refers to payment dividends and other payments for distribution profits in favor owners (participants) |
10 | Taxes on profit | Cash flows arising in connection with tax profit must open up separately and be classified like cash streams from operating room activity if only they don't can be specifically linked from financial or investment activities | Taxes on profit relate to the operating room activities | Tax payments on profit like as a rule, refer to current activities organizations (for except cases when income tax organizations directly Connected with monetary flows from investment or financial operations) |
11 | Investment to subsidiaries companies, associated and joint companies | When accounting investment in associated or subsidiary company, accounting in which is being conducted on equity method participation or method accounting for cost, investor limited to traffic report Money information about cash flow funds between yourself (investor) and object investing, For example dividends and in advances. Company, representing report on your share in joint controlled organizations (see IAS 31 "Participation in joint activities") with using method proportional consolidation, includes in its consolidated reporting on cash flow your funds proportional share of cash income and payments together controlled organizations. Company, representing report on your share using the method equity participation, includes in its traffic report Money monetary receipts and payments related with her investments in joint controlled organization, distribution and other payments or receipts between her and together controlled organization | Separate mention absent | Essential cash flows organizations between her and economic societies or partnerships, being according to towards organizations subsidiaries dependent or basic, reflected separately from similar cash flows between organization and other persons |
12 | Aggregate receipts and cash payments funds, arising in result acquisitions and sales of subsidiaries companies and others structural units should introduce yourself separately and be classified as an investment activity | Separate mention absent | Separate mention 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 into financial reporting to such way so that they provided all significant information about such investment and financial activities | Comments to report on movement Money should reflect information about all investment and financial activities during reporting periods that influenced on assets and liabilities, but were not reflected on the move monetary funds. In the report about the movement Money indicated only monetary part partly monetary and partially non-monetary operations | Separate mention absent |
14 | Components monetary funds and equivalents monetary funds | The company must reveal the composition cash and their equivalents and introduce reconciliation of amounts in her traffic report funds from equivalent articles, presented in balance sheet | Separate mention absent | Separate mention absent |
15 | Others requirements to disclosure information | The company must reveal (together with comments management) amount available to her significant cash balances funds and equivalents Money, which are not available for use group | Separate mention absent | Separate mention absent |
The comparison table allows you to clearly see the differences between PBU 23/2011 and its international analogues:
1. Purpose of compiling the report. The purpose of drawing up the 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 cash flow statements, 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, show the place of the cash flow statement in the financial statements and the importance of cash flows for assessing the financial position of the organization and assessing the possibilities for its growth and development.
2. Scope of application. From the point of view of formal characteristics, the scope of application of PBU 23/2011 coincides with foreign analogues.
3. Presentation of cash flow statement and general provisions. In general, there is also a formal coincidence with IFRS and GAAP on this basis. Here it is necessary to pay attention to the fact that the FAS 95 standard formulates a requirement for mandatory reconciliation of the opening and closing balances of cash and cash equivalents included in the Cash Flow Statement with balance sheet data.
4. Mandatory inclusion in financial statements. PBU 23/2011 states that the cash flow statement is included in the financial statements of the organization. IAS 7 and FAS 95 specify the mandatory inclusion of a cash flow statement in a complete set of financial statements (as governed by these rules, principles and standards). As a result of the existence of this seemingly insignificant difference, at present, when creating a complete set of Russian financial statements, there is a possibility of not including this report in the complete set of Russian financial statements. Analysis of the documents showed that in Russian legislation There are prerequisites and direct instructions that make it possible to present to external users not a complete set, but only a balance sheet and profit and loss account. In the Orders of the Ministry of Finance of Russia, which since 1996 regulated the composition and content of Russian financial statements, the wording changed, in accordance with which the set of financial statements and the place of the cash flow statement in it were determined. Thus, the Order of the Ministry of Finance of Russia dated November 12, 1996 N 97 “On the annual financial statements of organizations” states:
"1. Approve for the submission 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 annual financial statements include:
a) Balance sheet - form N 1;
b) Statement of financial results - form N 2;
c) explanations for balance sheet and financial results report:
Statement of capital flows - form N 3;
Cash flow statement - form N 4;
Appendix to the balance sheet - form No. 5;
explanatory note."
In Order of the Ministry of Finance of Russia dated January 13, 2000 N 4n “On Forms of Accounting Reports of Organizations,” this wording is repeated and a parity list of all main reporting forms is preserved. But Order No. 67n already states that: “The Balance Sheet included in the interim and annual financial statements shall be considered Form No. 1, the Profit and Loss Statement - Form No. 2. Included in the appendices to the Balance Sheet and the Profit and Loss Statement of the accounting reporting, the Statement of Changes in Capital should be considered Form No. 3, the Statement of Cash Flows - Form No. 4, the Appendix to the Balance Sheet - Form No. 5, the Report on the Purposeful Use of Received Funds - Form No. 6."
Thus, starting with the reporting for 2004, the cash flow statement began to be treated as an annex to two main reporting forms. The same trend is observed in Order No. 66n. It is obvious that the concept of a mandatory set of financial statements, which is formulated in international standards, is gradually being eroded.
This applies to small businesses (clause 3 of the Instructions on the scope of financial reporting 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 present a cash flow statement (Form No. 4) as part of their financial statements. The exclusion of these documents from the financial statements means that external users do not have access to a large amount of information characterizing changes in the financial position of the organization, and therefore are deprived of the opportunity to get a complete picture of financial situation organizations for the period. This approach has a negative impact on the amount of analytical information that is presented to external users for their acceptance. management decisions.
5. Terms and their definitions. A comparison of standards shows that PBU 23/2011 reflects the main terms and their definitions that must be used in the process of preparing a cash flow statement and analyzing cash flows from different types activities. However, the following aspects need to be noted.
Firstly, as in other Russian standards, PBU 23/2011 does not have a special section devoted to terms and their definitions. In international standards (IFRS and GAAP), the content is clearly structured and each standard is provided with content, part of which is also a definitions section. This is a very important methodological and systematic part of the work, which improves the quality of standards.
Secondly, for 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 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 are, to one degree or another, reflected in the methodology for constructing reporting indicators. Among these problems are:
- construction of 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 offset accounts for income and expenses;
- the presence of accounts, the construction of which violates such basic principles of financial accounting and financial reporting as the principle of a going concern, the principle of prudence or conservatism;
- availability of synthetic accounts, which include various elements financial statements.
In the current Russian Chart of Accounts, funds are located in section. 5 on synthetic accounting accounts from 50 to 59. The content of this section of the Chart of Accounts and its structure allow us to conclude that the composition of cash in Russian accounting includes not only monetary assets, but also monetary documents, financial investments and reserves for depreciation 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 use of the Chart of Accounts, “subaccount 50-3 “Cash documents” takes into account the postage stamps and stamps located in the organization’s cash desk state duty, promissory notes, paid air tickets and other monetary documents."
A comparison of cash accounts shows that checks and letters of credit can be called monetary documents rather than various types of stamps and other paid documents that are currently recorded in the Cash Account. This conclusion follows from the nature of these documents. Check- This is a written order from the payer to his bank to pay a certain amount from his account to the holder of the check. Most often, a distinction is made between cash checks and settlement checks. Cash checks are used to pay the holder of a check cash at a bank, for example on wages, economic needs, travel expenses etc. Payment checks- these are checks used for non-cash payments. Letter of Credit(German akkreditiv - trust) is a conditional monetary obligation bank, issued by it on behalf of the buyer in favor of the seller, for which the bank that opened the account (issuing bank) can make payments to the seller or authorize another bank to make such payments, subject to the presence of documents provided for in the letter of credit, and subject to the fulfillment of other conditions of the letter of credit. Settlements using a letter of credit are also called “settlements using the LS system” (letters of credit).
A comparison of checks and letters of credit with stamps and paid tickets shows the 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 monetary transactions. Such an exchange does not result in a loss of liquidity, and these assets are, in fact, the most liquid cash equivalents. Stamps, tickets and other paid documents are not intended to be exchanged for money, as they are purchased for another purpose. As a rule, when selling already purchased tickets, part of their value is lost, and postage stamps are not intended for sale at all. Therefore, we can consider that the level of liquidity of these assets is very doubtful and clearly lower than that of cash and cash equivalents. The presence of such assets in cash can be considered an atavism that was inherited from the previous accounting system, which is still largely present in the current Chart of Accounts. It is obvious that the transfer of the “Money Documents” sub-account from account 56 in the old Chart of Accounts to account 50 “Cashier” only aggravated the existing contradiction that was in the old Chart of Accounts, since now stamps, tickets and similar documents are equated to money in the Russian Chart of Accounts 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 cash, monetary assets includes 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 section 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 added to cash due to their high liquidity and low risk of its decline due to the short maturity. Due to this circumstance, cash equivalents in mandatory must be added to the funds, i.e. an assumption is made about their identity with money. This is confirmed 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 next to cash. This raises the question: why was 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 section. Table 6 "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 necessary integral part standard, since they contain the methodology for determining net cash flow from operating activities. In Sect. Table 7, “Presentation of Cash Flows from Operating Activities,” sets out the methods for generating net cash flow from investing and financing activities in IFRS and GAAP. These terms and the corresponding section are also absent in PBU 23/2011. We can conclude that PBU 23/2011, which is called the “Cash Flow Statement”, 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 analogues. 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 N 4, in contrast to IFRS and GAAP, is placed 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 connection between interest and dividends and cash flows is most fully disclosed in IFRS. It seems most important that IAS 7 shows the analytical function of transactions associated with the receipt and payment of interest and dividends. It states that, although the payment of dividends is a financial transaction in nature, it can also refer 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 - issues, 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, starting 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 suggested that cash flows relating to income taxes should be disclosed separately and classified as cash flows from operating activities 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 into Russian accounting of such new elements as the cost method of accounting, the method of accounting by equity participation, associated enterprises, proportionate consolidation, etc.
12. Acquisition and sale of subsidiaries and other structural units. There is no separate mention in PBU 23/2011 about such operations.
13. Non-monetary transactions. Non-monetary transactions include “investment and financial operations"that do not require the use of cash or cash equivalents" is stated in IAS 7. Such transactions must be excluded from the statement of cash flows and must be disclosed in the financial statements in a manner that provides all relevant information about those investing and financing activities. (therefore, in the cash flow statement layout, which is prepared in accordance with IFRS, these transactions are shown in the note).
There is no separate mention in PBU 23/2011 about such operations. However, it seems that this is very important aspect, requiring separate disclosure. Currently, this is especially important for Russian enterprises. This is explained by the fact that in Russian practice, non-monetary transactions, as a rule, include barter transactions related to operational activities. Obviously, classifying 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 and the need to provide 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. Under this section, IAS 7 requires an entity to disclose (together with management's commentary) the amount of significant cash balances and cash equivalents it has that are not available for use by the group. The standard provides relevant examples to illustrate this requirement. An example relating to disclosure can also be given. In accounting, there is the concept of “minimum cash balance” (in GAAP these funds are called “compensating 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, in cash flow statements compiled according to international standards, on a separate line cash and cash equivalents and temporarily immobilized cash balances are shown, which certainly increases the analytical capabilities of users.
The analysis shows that PBU 23/2011, firstly, needs to be refined and supplemented, and secondly, Russian enterprises must still use IAS 7 and the Principles for the Preparation and Presentation of Financial Reports to prepare systematic financial statements. approved by the IFRS Committee in 1989.
Bibliography
- Williams Y. GAAP Handbook with comments. 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 November 12, 1996 N 97.
- On the forms of financial statements of organizations: Order of the Ministry of Finance of Russia dated January 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 July 2, 2010 N 66n.
- On approval of the Accounting Regulations “Cash Flow Report” (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