Russian Accounting Standards of Russian Accounting Standards. What is accounting in accounting
The content of the balance sheet is determined by PBU 4/99 “Organization's financial statements”. The balance sheet reflects actual data on the property and financial condition, clearly distinguished sources of own and borrowed, while the formation of the asset structure provides for the arrangement of items in order of increasing liquidity, and liabilities in order of increasing degree of demand for capital. In many countries with developed market economy the content of the balance sheet is built in the inverse degree of liquidity, for example in the United States.
The balance sheet is built in accordance with the classification of household assets, that is, it consists of two equal parts: one reflects funds by their composition - assets, and the other by sources of formation - liabilities.
The balance structure is based on the principle of duality - the fundamental concept of accounting and implying the equality of the total assets and liabilities, which can be written in the form of a formula:
Assets \u003d Equity + Accounts payable
The decomposition of the right side of the balance into two components in the indicated sequence has a deep economic meaning. In case of liquidation of an economic entity due to insolvency (bankruptcy) current legislature First of all, it provides for the satisfaction of obligations to creditors, in a strictly established order. At the same time, investors on invested capital receive only the part that remains after payment of obligations.
The balance can be built vertically, like most Western companies, or horizontally, like Russian organizations. In the USA, in the UK, both forms of balance building are provided.
An asset can be on the left, and a liability on the right (in the Russian balance sheet) or vice versa (typical for British companies of the 50-60s).
The current legislation of Russia establishes uniform fundamental principles and rules for the preparation of the balance sheet for all entities. The current balance sheet structure is largely close to world practice.
PBU 4/99 fixes the requirement for compilers of the balance sheet to present in it assets and liabilities with a subdivision depending on the term of circulation (repayment) for short-term and long-term ones. Assets and liabilities are presented as short-term if the maturity (repayment) period for them is no more than 12 months after the reporting date, or the duration of the operating cycle if it exceeds 12 months. All other assets and liabilities are presented as non-current.
Each element of an asset and liability is called a balance sheet. Balance sheet items according to their economic substance divided into five sections, uniting certain groups of articles.
International standards do not provide any standard form balance sheet and determines only the circle of mandatory balance sheet items:
- · Fixed assets;
- · intangible assets;
- · Financial assets;
- · Investments accounted for using the participation method;
- · Stocks;
- · Trade and other receivables;
- · Cash and cash equivalents;
- · Debt of buyers and customers and other receivables;
- · tax liabilities;
- · Reserves;
- · Long-term liabilities, including interest payments;
- · Minority interest;
- · Issued capital and reserves.
In Russia, the balance sheet is enshrined in law (Order of the Ministry of Finance No. 66n of July 2, 2010 on Forms accounting statements"). There are a number of differences in the disclosure of balance sheet items, which are listed below.
Key differences with respect to property, plant and equipment relate to depreciation. In accordance with international accounting standards, company management is allowed to independently determine the life of fixed assets, depending on how long the company intends to use them. Although PBU 6/2001 “Accounting for fixed assets” (as amended on 12.24.2010) also states that the organization itself determines the term beneficial use fixed assets, in practice organizations for the purposes accounting continue to use the depreciation rates established by the Decree of the Council of Ministers of the USSR of October 22, 1990 No. 1072 "On uniform standards depreciation charges for the full restoration of the fixed assets of the national economy of the USSR. ” In connection with the adoption of Chapter 25 Tax code many enterprises use the new classification of fixed assets established by Decree of the Government of the Russian Federation of January 1, 2002 No. 1 “On the classification of fixed assets included in depreciation groups", I.e. preference is given tax accounting. The difference in service life leads to discrepancies in size residual value assets, and also in depreciation amounts accrued for a certain period, presented in accordance with the Russian accounting system and IFRS. The main methods for calculating depreciation, in accordance with domestic and international standards, are presented in table 1.
Table 1
Depreciation Methods
However, in practice, Russian enterprises again mainly use the linear method prescribed by the Tax Code.
An important difference is that Russian accounting does not use a regular analysis of assets for impairment, while IAS 36 Impairment of Assets applies to a large number of assets recognized in the balance sheet (intangible assets, fixed assets, investments). The main objective of this standard is to provide a real assessment of assets in financial statements by recognizing an impairment loss (reduction in value, value) when the net carrying amount exceeds the recoverable amount. Loss is recognized in the income statement for the reporting period, and if the asset has been revalued previously, it is included in the reduction of the revaluation reserve. IAS 36 provides for a number of possible indicators of impairment, the existence of which an entity must verify at each reporting date using a number of external and internal sources of information. If at least one of them is identified, it is necessary to estimate the recoverable amount of the asset to determine the impairment loss.
The Russian rules do not provide for the recognition of such a loss. PBU 6/01 provides for the markdown of fixed assets based on the results of revaluation, while the amount of the markdown is charged to retained earnings ( uncovered loss) or to reduce the additional capital of the organization formed by the revaluation amounts of this object carried out in previous reporting periods. However, Russian standards do not aim at regular analysis of assets for their impairment and recognition of losses in the reporting year.
The definitions of intangible assets according to IAS 38 “Intangible Assets” and PBU 14/2007 “Accounting for Intangible Assets” are generally consistent, although there are some differences. The first is that according to RAS 14/07, intangible assets (intangible assets) must be used for a long time, i.e. have a useful life of more than 12 months. IFRS does not provide temporary criteria for the recognition of intangible assets, i.e. suggests a more flexible approach. The second difference is that according to paragraph 3 of PBU 14/07, for the recognition of intangible assets, it is necessary to have properly executed documents confirming the existence of the asset itself and the exclusive right of the organization to the results of intellectual activity (patents, certificates, other protection documents, assignment (acquisition) agreement patent, trademark, etc.). IAS 38 does not require legal rights, as the main criterion is the ability to control future economic benefits from the use of intangible assets, because a company may otherwise control these benefits.
As a result of the mismatch of definitions, there are a number of differences in the recognition of certain objects of intangible assets in accounting. For example, PBU 14/2007 relates organizational expenses to intangible assets. In accordance with IAS 38, organizational expenses are not recognized by intangible assets, as they are not directly related to obtaining economic benefits from them. Despite the fact that the costs of establishing an organization are incurred in order to obtain future economic benefits, there is no real probability of their receipt at the time the company was created - the company may be, for example, unprofitable.
In Russian accounting, assets created by the enterprise itself, such as the value of its own created software, "Know-how", the exclusive right to a trademark may be reflected as intangible. According to IFRS, assets created by the enterprise itself must meet the following criteria: the asset must be potentially profitable in economic terms, and the value of the asset must be reliably determined. Internally created trademarks should not be recognized as part of intangible assets, since the costs of them cannot be distinguished from the costs of developing the company as a whole.
14/2007 to intangible assets business reputation of an organization. IAS 38 distinguishes between internally generated goodwill and goodwill arising on a business combination. Internal business reputation is not recognized by intangible assets and is not generally recognized as an asset because it is not an identifiable resource and cannot be measured reliably. Goodwill as an asset arises and is recorded only when you purchase another company as a whole as a property complex. In this case, the organization joins all the assets and liabilities of the acquired company, paying a certain fee for it. The difference between the amount paid and the value of the acquired assets and liabilities makes up a goodwill. Although IAS 38 explicitly requires recognition of goodwill as a depreciable asset, goodwill is shown on a separate line in the non-current assets section. Unlike IAS 38, PBU 14/2000 does not distinguish between internally created and acquired goodwill.
Another important issue is cost accounting for research and development. Research work - original and planned research conducted in order to obtain new scientific or specialized knowledge. Development work - application of results scientific research or other knowledge in the development of a plan or project for the production of new or substantially improved materials, devices, products, technologies, systems or services, before the start of industrial production or use. According to IFRS, the costs of research and development work must be recorded as expenses of the period during which they were incurred, unless the following conditions are met (in such cases, they must be accounted for as intangible assets):
- 1. The technical feasibility of a product or process can be demonstrated;
- 2. the company intends to manufacture, sell or use a product or process;
- 3. the presence of a market for a product or process can be demonstrated, or, if it is intended for domestic use rather than for sale, then its usefulness to the company;
- 4. there are sufficient resources, or their availability can be demonstrated, to complete a project, sell or use a product or process;
- 5. The costs attributable to the product or process can be reliably estimated.
In Russian accounting, R&D expenses can be capitalized both in terms of research and development, and in the event of a positive result. Since the presence of a positive result does not unambiguously mean the possibility of using or selling the results of research and development, it is necessary to recognize the significant difference in the qualification of these objects in Russian accounting from the requirements of IFRS. Therefore, when preparing financial statements in IFRS format, you should write off those costs of expenses corresponding periodthat do not fall under the definition of costs for research and development in accordance with IFRS.
Also, in the Russian legislation there are no clearly defined procedures for accounting for business combinations (buying and merging interests) and reflecting the positive or negative business reputation (goodwill) that arises from this. According to RAS 14/2007, goodwill is the difference between the purchase price of an organization and the cost of the balance of all its assets and liabilities. Under IAS 38, goodwill is defined as the excess of the purchase price of the acquiree over the fair value of the assets and liabilities acquired. Fair value by international standards is the amount for which an asset can be exchanged in a transaction between knowledgeable, willing parties. The fair value of properties may differ materially from their value. book value. Thus, the difference between the fair and book value of the assets and liabilities of the acquired organization leads to different estimates of the goodwill in Russian and international standards.
Like fixed assets, Russian accounting does not provide for regular analysis of intangible assets for possible impairment (IAS 36). Also, the list of disclosed information in financial statements in IFRS is wider than in Russian accounting.
Thus, with regard to intangible assets, there are differences between Russian and international standards in almost all respects. Perhaps the Russian national standard should not be a complete copy of the corresponding international one. However, the interaction of domestic organizations with foreign partners requires an understanding of the reporting of our companies by a foreign user. Intangible assets - one of the most complex objects of accounting, their intangibility, problems with identification and assessment can lead to ambiguous interpretations of reporting.
A number of differences can be distinguished when accounting for inventories. Inventory accounting is regulated by IFRS 2 “Inventories” and PBU 5/01 “Inventory accounting”. PBU 5/01 instructs to evaluate the MPZ at actual cost. And at the end of the reporting period, material productive reserves should be reevaluated: “Inventories that are outdated, completely or partially lost their original quality, or current market value, the sale value of which has decreased, are reflected in the balance sheet at the end of the reporting year minus the allowance for reduction material assets". Based on this definition, it is somewhat unclear how stocks should be valued, the price of which may be sold in one reporting period was lower than the actual cost, and in the next reporting period increased above the actual cost. In accordance with IFRS 2, inventories should be valued at the lower of cost and net realizable value. At the same time, in accordance with IFRS, the possible sales price is calculated net of selling expenses, which is not provided for in Russian accounting.
Further, upon receipt and write-off of the same types of inventories with different actual cost it becomes possible to use several methods for calculating the current cost per unit of inventory. Cost of inventories (other than goods in trade accepted for accounting at selling prices and low-value and wearing items) under Russian law can be produced in the following ways:
- - at the cost of each unit;
- - at average cost;
- - at the cost of the first time acquisition MPZ (FIFO method);
Unlike Russia, in international practice 2 methods are provided:
- - FIFO method (basic accounting procedure);
- - The method of weighted average (basic accounting);
Investments can be classified as short-term or long-term. Ongoing investments are easily tradable in nature and are designed for a period of not more than one year. Long-term investments are investments designed for a period of more than one year. The Russian accounting system requires that both current and long-term investments be presented in the balance sheet at the cost of their acquisition. In contrast, international accounting standards allow long-term investments to be taken into account, depending on their nature:
- - at cost (i.e. including acquisition costs, such as brokerage and bank fees, fees, duties);
- - at revalued amounts;
- - at the lower of two values: cost and market value.
In accordance with international accounting standards, short-term investments can be reflected in the balance sheet at market value or at a lower cost and market value (i.e. the amount that will be received as a result of the sale of the investment by stock market) The profit (loss) arising as a result of such an assessment should be reflected in the profit and loss statement.
In case of cost reduction long-term investment, which is estimated not to be short-term, its carrying amount is reduced. Such a decrease in the value of long-term investments, with the exception of a temporary decrease, is recognized in the income statement. The increase in the carrying value of long-term investments resulting from the revaluation of long-term investments should be credited to the credit account of changes in the value of investments as a result of revaluation in the equity section. To the extent that the decrease in the value of investments compensates for a previous increase in the value of the same investment that was allocated to the credit of the account of changes in the value of investments as a result of revaluation and subsequently was not reversed, this decrease is recorded in the account of changes in the value of investments as a result of revaluation. In all other cases, the reduction in carrying amount should be recognized as an expense.
There are differences in the approach to creating a provision for doubtful accounts receivable. When creating a reserve, Russian enterprises are mainly guided by Article 266 of the Tax Code, as a result of which this approach suffers from formalism. Russian accounting and reporting standards provide for reserves only for specific debt. IFRS allow the possibility of creating a general reserve for all receivables, for example, as a percentage of net sales. In practice, when reporting to Russian enterprises under IFRS, the allowance for doubtful debts is a very significant percentage and significantly reduces profit margins.
About twenty years ago, only a few knew about international accounting standards (IFRS) in Russia. Now the situation is changing, the number of specialists in the field of IFRS is growing every year.
Perhaps you would like to know a little more about IFRS in order to keep up to date. Maybe some of you even started reading textbooks on IFRS or the standards themselves, but due to the fact that this is a very large amount of information, and the accountant has little free time, the desire to delve into IFRS has passed. IFRS experts say that it takes several years to study international standards.
But the main difficulty in mastering IFRS is that the approach to accounting in international standards is significantly different from the Russian accounting tradition, and it’s hard for our accountants to rebuild. Read how our IFRS differs from Russian Accounting Standards, i.e. Russian Accounting Standards (RAS), in the series of our articles.
They will be useful to anyone who wants to quickly get a general idea of \u200b\u200binternational standards.
IFRS developed by a non-governmental non-profit organization - the International Accounting Standards Board (IASB) - at the initiative of large companies. Formally, no state can influence the decisions made by this organization.
International accounting firms, numerous large companies, banks, and also the governments of many countries finance the IASB on a voluntary basis.
The main objective of the organization is to develop in the public interest a single set of high-quality, understandable, and practically implemented world-wide standards for financial reporting based on clearly formulated principles.
Currently, more than 100 countries have officially prescribed or authorized the application of IFRS.
Reporting period
RAS
In RAS, the reporting year always coincides with the calendar year ending December 31 (an exception is provided for newly created organizations) p. 1, 3 tbsp. 15 of the Law of December 6, 2011 No. 402-FZ. This procedure is established by law, so all organizations are required to comply with it.
IFRS
IFRS approaches this issue more flexibly. A company may report for a year ending on any date with clause 36 of IAS 1. For example, a Siemens fiscal year begins on October 1 and ends on September 30.
Moreover, companies are allowed to report for a period of 52 weeks (i.e. 364 days) clause 37 of IAS 1. After all, the calendar year contains a non-integer number of weeks (approximately 52.14 weeks), and it is inconvenient for some companies to prepare reports for this period.
Chart of accounts and reporting forms
RAS
In Russia, companies are required to comply with a single Chart of Accounts (although banks and the public sector have their own charts of accounts and approved reporting forms). If the company wants to use an account number not provided for by the Plan, it can only do this with the permission of the Ministry of Finance Instruction Approved By order of the Ministry of Finance of 10.31.2000 No. 94n.
Mandatory reporting forms - approved by Order of the Ministry of Finance Order of the Ministry of Finance dated 02.07.2010 No. 66n.
IFRS
IFRS does not have a single approved or recommended chart of accounts. Each company reporting in accordance with IFRS develops its own chart of accounts based on the specifics of its activities and the necessary detailing of financial information.
At the same time, a company may use the chart of accounts of Russian accounting for IFRS purposes if it prepares international financial statements using the transformation method.
Of course, there are no approved forms of financial statements in IFRS either. Instead, IAS 1 Presentation of Financial Statements provides general guidance on the structure of financial statements and minimum requirements to its content.
The composition of the financial statements in IFRS is the same as in RAS. Only the names of some forms differ. So, in our IFRS balance sheet there is a statement of financial position, and a statement of financial performance - a statement of comprehensive income. Statement of changes in equity and statement of movements money (ODDS) in IFRS are called the same as in Russian accounting.
However, the names of reporting forms in IFRS are also optional - as long as they are understandable to users of statements and clause 10 of IAS 1. Further, for simplicity, we will call the IFRS reporting forms as they are called in RAS.
The balance in IFRS can be made in two ways (at the choice of the organization):
- <или> with the division into short-term and long-term assets and liabilities, that is, as in RAS;
- <или> without such a separation, but in order to reduce or increase liquidity.
The presentation form should provide reliable and relevant information. For example, banks usually choose a presentation method in decreasing order of liquidity, and manufacturing companies - with the division into short-term and long-term assets and liabilities.
In the statement of financial performance, expenses associated with the main activity can also be presented in two ways (at the option of the organization):
- <или> by the function of expenses (cost, selling expenses, administrative expenses, etc.), that is, as in RAS;
- <или> according to the nature of expenses (depreciation expenses, employee benefits expenses, etc.).
Cash flow statement
RAS
PBU 23/2011 provides only one method for the preparation of ODDS, it is called direct. With this method, detailed information about the species is disclosed. cash receipts current, investment and financial activities.
IFRS
Under IFRS, a company can provide information on cash flows from current (the term “operating” is used in IFRS) activities in one of two ways. clause 18 of IAS 7:
- direct method, as in RAS;
- indirect method.
The peculiarity of the odds drawn up by the indirect method is that the indicator “Net cash inflow (outflow) from current operations” is obtained by calculation. For this, net profit (loss) is adjusted for items that are taken into account when calculating profit (loss), but did not entail an inflow (outflow) of money. For example, depreciation is an item that reduces profit, but does not entail an outflow of money, so when adjusting for profit, this item is added. Obviously, the result (net cash inflow (outflow) from current operations) with the indirect method will be the same as if it were obtained by the direct method. However, a report compiled by an indirect method does not contain information on cash flow in operating activities.
Indirect ODDS is simpler than direct. However, IFRS recommends the use of a direct method for the preparation of ODDS, as it gives useful information for estimating future cash flows not available when using indirect method a clause 19 of IAS 7.
Reporting Currency
RAS
According to RAS, accounting is conducted and reporting is only in rubles x clause 9 of the Regulation, approved. By order of the Ministry of Finance dated 07.29.98 No. 34n.
IFRS
In IFRS, accounting is conducted in the so-called functional currency. Functional Currency - This Currency economic environmentin which the company operates clause 8 of IAS 21.
In determining the functional currency, in particular, p. 9, 10 IAS 21:
- in what currency are prices set and payments are made for goods and services of the company;
- the currency of the country whose conditions determine the sale prices for goods and services of the company (for example, Russian gas can be sold for rubles, but in fact its price is tied to the dollar);
- in what currency are mainly the remuneration of labor, materials and other costs associated with the provision of goods and services by the company.
Example. Functional Currency Definition
/ condition / The Russian company is engaged in wholesale trade in raw materials. Raw materials are bought and sold for USD. The company bears all other costs in rubles.
/ decision / The functional currency of the company will be USD, since it is in this currency that prices for the goods of the company are set and payment for the goods purchased is made. The amount of all other expenses of a wholesale company is likely to be significantly less than the cost of goods sold.
When transactions in any other currency, in addition to the functional, are converted into functional currencies at clause 17 of IAS 21. Reporting can be made in any currency, it is called the reporting currency and clause 8 of IAS 21. That is, the accounting currency and the reporting currency may be different. If the reporting currency of the company is one, and the functional currency is different, then the financial results and financial position are translated into reporting currency and clause 18 of IAS 21. All exchange differences arising from the transfer are recognized in other comprehensive income (i.e., are attributable to equity) clause 39 of IAS 21.
IFRS does not establish language requirements for reporting, but it is usually written in English.
In the next issue, we will continue to consider the differences between RAS and IFRS.
The results of the production and financial activities of any Russian company should be reflected in the reports submitted at the end of each reporting period to various authorities - from statistical offices and extrabudgetary funds to inspections of the Federal Tax Service. Accounting in our country is based on strictly regulated rules, united by a single abbreviation - RAS . Let’s try to understand these complex specific definitions and learn about the requirements that they set for the preparation of the financial report.
What is RAS in accounting
Russian accounting standards, and this is how RAS is decrypted, are a combination of legislatively approved accounting standards and regulations (RAS), which very strictly regulate accounting and financial reporting.
Knowledge of RAS is mandatory for financial employees of Russian companies. There is a whole package of legislative documents that have become the basis for Russian Accounting Standards and are mandatory for use by companies throughout Russia (except for banks / credit organizations whose activities are repaired by the rules issued by the CBR). These include the Law “On Accounting” dated December 6, 2011 No. 402-ФЗ, the Chart of Accounts with instructions for use, the Regulation on accounting and reporting, as well as 24 Accounting Regulations explaining various aspects of accounting.
Balance currency and accounting in Russian enterprises
All of these documents, representing the basics of RAS, are also interpreted in accounting rules: financial statements, as well as accounting of property and monetary assets, liabilities, business operations carried out in national currency RF - in rubles, and the documentation of all business transactions of each company is exclusively in Russian. In partnership with foreign companies, the primary documents accepted for accounting should be interlinearly translated into Russian, if drawn up in another language.
RAS reporting
Interim reporting under RAS is compiled quarterly. At the end of the calendar year, the fiscal year ends. Legally established reporting date consider December 31. The results of operations for the year are reflected in the annual financial statements of the company. It is formed from:
- balance sheet;
- reports - on financial results, capital flows, cash;
- annexes to the forms provided for by law;
- explanatory note;
- an audit report confirming the correctness of accounting (for organizations with a mandatory audit report).
The composition of the interim reporting is identical to the annual package of forms with the exception of the audit report.
RAS Consolidated Reporting
Domestic holdings with an extensive structure of subsidiaries and dependent divisions compile consolidated financial statements, i.e., combine the results in a general report on the company. Consolidation techniques are based on the systematization of information reflecting the financial condition, changes and results of the organization. Compilation of consolidated financial statements is regulated by the Law “On Consolidated Financial Statements” dated July 27, 2010 No. 208-FZ. It contains the basic requirements for the preparation, presentation and disclosure of reporting for almost all enterprises and groups of companies, except those belonging to the public sector, municipal or budget appropriations.
Consolidated statements consist of a consolidated balance sheet, reports on financial results, cash flows, changes in equity and their annexes. It appears to the Central Bank of the Russian Federation within 3 after the end fiscal year, some companies, depending on the requirements of the law and the Central Bank of the Russian Federation, also submit interim quarterly consolidated statements.
RAS internal and external users
Information from financial statements prepared in accordance with RAS is required:
- internal users - the founders, management, owners of the property of the company, to make informed decisions for the further development of the company;
- external users - lenders, investors to analyze the current situation and government bodies, for example, the IFTS for fiscal purposes, checking compliance with established standards, calculating taxes and fees.
Thus, RAS, the interpretation and essence of which are discussed in the publication, are a set of documents that dictate the scope of accounting and reporting financial forms.