Basic principles of international accounting standards. International Accounting and Financial Reporting Standards International Accounting and Financial Reporting Standards

29.10.2020

IFRS GAAP Financial statements Areas of Accounting

Cost Accounting Financial Accounting Forensic Accounting
Fund accounting Management accounting Tax accounting
Budget accounting Bank accounting

Audit Financial control

International Financial Reporting Standards(IFRS; IFRS English. International Financial Reporting Standards ) - a set of documents (standards and interpretations) that regulate the rules for preparing financial statements, necessary for external users to make economic decisions regarding the enterprise.

IFRS, unlike some national reporting rules, are standards based on principles rather than hard-coded rules. The goal is that, in any practical situation, drafters can follow the spirit of the principles, rather than trying to find loopholes in well-defined rules that would allow them to get around some basic provisions. Among the principles: the principle of accrual (accrual basis), the principle of continuity of activity (going concern), caution (prudence), relevance (relevance) and a number of others.

Application in various countries

International Financial Reporting Standards have been adopted as mandatory in several European countries. In most European countries, reporting in accordance with IFRS is required to prepare companies whose securities are traded on the stock exchange.

In the United States, which now uses its own accounting standards US GAAP, in August 2008, the Securities and Exchange Commission presented a preliminary plan for the transition to IFRS and the abandonment of GAAP. In accordance with this plan, starting from 2010, multinational American companies (it is expected that by this time there will be at least 110 of them) will be required to provide financial statements in accordance with IFRS. It is assumed that starting from 2014, the formation of IFRS statements will become mandatory for all American companies.

In 2011, the first 63 standards and interpretations were recognized as applicable on the territory of the Russian Federation. Consolidated financial statements must be provided by organizations that are subject to Law No. 208-FZ, starting with statements for 2012.

List of currently valid standards

IFRS

IAS

IAS 1 Presentation of Financial Statement
IAS 2 Stocks
IAS 7 Cash Flow Statements
IAS 8 Accounting policies, changes in accounting estimates and errors (Accounting Policies, Changes in Accouting Estimates and Errors)
IAS 10 Events After the Balance Sheet Date
IAS 11 Construction Contracts
IAS 12 Income Taxes
IAS 16 Fixed assets (Property, Plant and Equipment)
IAS 17 Leases
IAS 18 Revenue (Revenue)
IAS 19 Employee Benefits
IAS 20 Accounting for Government Grants and Disclosure of Government Assistance
IAS 21 The Effects of Changing in Foreign Exchange Rates
IAS 23 Borrowing Costs
IAS 24 Related Party Disclosures
IAS 26 Accounting and Reporting by Retirement Benefit Plans
IAS 27 Consolidated and Separate Financial Statements
IAS 28 Investments in Associates
IAS 29 Financial Reporting in Hyperinflationary Economies
IAS 31 Financial Reporting of Interests in Joint Ventures
IAS 32 Financial Instruments - Presentation of Information (Financial Instruments: Presentation)
IAS 33 Earnings per Share
IAS 34 Interim Financial Reporting
IAS 36 Impairment of Assets
IAS 37 Reserves, contingent liabilities and contingent assets (Provisions, Contingent Liabilities and Contingent Assets)
IAS 38 Intangible Assets
IAS 39 Financial Instruments: Recognition and Measurement
IAS 40 Investment Property
IAS 41 Agriculture (Agriculture)

In addition to standards, interpretations that reveal one or another issue of applying standards are mandatory for application:

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities
IFRIC 2 Shares in cooperatives and similar financial instruments (Members "Shares in Co-operative Entities and Similar Instruments)
IFRIC 4 Determining whether an Arrangement contains a Lease
IFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds
IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment
IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies
IFRIC 8 Scope of IFRS 2
IFRIC 9 Links to Reassessment of Embedded Derivatives
IFRIC 10 Interim Financial Reporting and Impairment
IFRIC 11 IFRS 2 - Group and Treasury Share Transactions (IFRS 2 - Group and Treasury Share Transactions)
IFRIC 12 Service Concession Arrangements
IFRIC 13 Customer Loyalty Programs
IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
IFRIC 15 Agreements for the Construction of Real Estate
IFRIC 16 Hedges of a Net Investment in a Foreign Operation
IFRIC 17 Distributions of Non-Cash Assets to Owners
IFRIC 18 Transfers of Assets from Customers
SIC 7 Introduction of the Euro
SIC 10 Government Assistance - No Specific Relationship to Operating Activities
SIC 12 Consolidation: Special Purpose Entities
SIC 13 Jointly Controlled Entities - Non-Monetary Contributions by Venturers
SIC 15 Operating lease. Incentives (Operating Leases - Incentives)
SIC 21 Income Taxes: Recovery of Revalued Non-Depreciable Assets (Income Taxes - Recovery of Revalued Non-Depreciable Assets)
SIC 25 Income taxes: changes in the tax status of a company or its shareholders (Income Taxes - Changes in the Tax Status of an Entity of its Shareholders)
SIC 27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease
SIC 29 Service Concession Arrangements: Disclosures
SIC 31 Revenue: Barter Transactions Involving Advertising Services (Revenue - Barter Transactions Involving Advertising Services)
SIC 32 Intangible Assets: Web Site Costs (Intangible Assets - Web Site Costs)

Notes

Literature

First application of IFRS. - M .: Alpina Publisher, 2013. - 448 p. - ISBN 978-5-9614-2241-2

Links

Ministry of Finance of the Russian Federation: Accounting. International standards and international cooperation
National Financial Reporting Standards Board
Official Journal of the European Union, 13 October 2003. Official publication of the IAS
The latest edition of IFRS in Russian, Ukrainian, English, tips for studying IFRS and preparing for the DipIFR exam
International Financial Reporting Standards: the latest news

Wikimedia Foundation. 2010 .

According to official data, in 2015 the introduction of such regulations as special categories will become mandatory. The most common abbreviation for this concept is IFRS.

stock market professional participants;
commodity exchanges;
non-state pension funds;
clearing companies;
joint-stock investment funds;
managing organizations of the above categories.

It makes sense to start with the question: "IFRS - what is it?". This concept stands for a set of specialized documents, or rather standards, through which the regulation of the procedure for creating financial statements that are freely available to external users is carried out.

IFRS versus Russian accounting system

First of all, there is a difference in the end users of information, which includes the relevant accounting indicators, grouped according to the above standards. In particular, the Russian model was aimed at government bodies and statistics, while the international model was aimed at investors, enterprises and financial institutions. As a result, in the associated differences regarding interests and needs for financial information, there are also different principles on which the procedure for generating these reports is based.

So, a mandatory rule in IFRS is the priority of content regarding the form of presentation of previously specified information. Speaking of Russian system accounting, this moment is most often omitted.

A practical example would be a situation in which PBU is considered part of the capital of an enterprise, although very little is observed regarding their economic nature. distinguishing features from bonds. In accordance with IFRS, these features are significant in order not to be reflected in equity.

The purpose of introducing IFRS to Russian enterprises

In order to form an adequately perceived and understood by users of various countries, international standards were introduced. Their purpose is to unify the compilation of the complex of documents under consideration and provide data on the activities of a company.

It is worth highlighting the list of documents defining IFRS aimed at their unification with respect to the order of creation, namely:

balance sheet;
Report on ;
Profits and Losses Report;
statement of changes in equity or other transactions in this direction;
accounting policy.

Along with the above reports, enterprises can also generate certain reviews for the management team, which display the profit indicators of this company.

IFRS - what is it?

This accounting system looks like a specific set of documents, including the following elements:

preface to the provisions of the standards in question;
clarification of the fundamental principles of preparation and the form of presentation of this type of reporting, in essence the concept of IFRS;
standards and related interpretations to these documents.

Each of the above documents has its own significance, but is used exclusively in combination with other elements. Thus, from the list indicated earlier, it means that IFRS are standards, each of which has a specifically established structure.

The semantic aspect of the standards of the accounting system under consideration

They establish rules that determine the procedure for deciphering individual transactions performed in the course of the core activities of the enterprise and reflected in the financial statements.

It is important to note that the standards adopted by the relevant body before 2001 are called International Accounting Standards or abbreviated IAS, and then, since 2001, International Financial Reporting Standards, the abbreviation of which has such a spelling - IFRS.

Current above standards

The main IFRSs developed prior to 2001 include:

International Financial Reporting Standards

The list of standards of the accounting system under consideration, adopted since 2001, is as follows:

"Adoption of International Financial Reporting Standards for the first time" (IFRS No. 1).
“Share Based Payments” (IFRS No. 2).
Business Combination (IFRS No. 3).
Insurance Contracts (IFRS No. 4).
“Non-current assets held for sale and discontinued operations” (IFRS No. 5).
"Exploration and Evaluation of Mineral Resources" (IFRS No. 6).

What marked the current year with regards to the accounting system in question?

From official sources it became known about the readiness of the last volume of IFRS 2014, which has the name "Red Book". It contains the rules for international accounting, including those that will come into force after January 01 of the current year. An example is the included amendments to the ninth standard, called "Financial Instruments", adopted since 2001. There are also two sets of annual changes regarding IFRS 2011-2013 and IFRS 2010-2012, one interpretation on fees, the constitution of the IFRS Foundation, a detailed work plan.

What is good about this accounting system?

In order to form a financial report that is correct by international standards, IFRS will be indispensable in helping.

It is worth highlighting a number of advantages of this accounting system, which may be associated with the activities of the following entities:

investors, as this is due to clarity, transparency, reliability and lower costs.
Companies, because the costs of measures to attract investments are reduced, there is a unified accounting system, there is no need to harmonize financial information, the order in both internal and external accounting.
Auditors: in view of the fact that there is uniformity in the fundamentals, there is an opportunity to participate in the adoption of relevant standards, large-scale trainings are held.
The developers of these standards themselves - due to the fact that this is an excellent opportunity for the exchange of experience, the basis for future national standards and the convergence of existing ones.

All of the above helps once again to get an answer to the question: "IFRS - what is it?"

How to smooth the transition to IFRS?

The objectives of the reform include the following:

Special training of accountants to the level of professional knowledge of the basics of the accounting system in question.
Strengthening in the minds of business leaders a real interest in providing truthful and objective information.
The final delimitation of accounting into tax, financial and managerial.

The importance of the transition is due to the fact that IFRS are standards that are a compromise between the main global accounting systems.

The attractiveness of accounting reform for businesses around the world

The IFRS financial statements under consideration can make it easier for companies to different countries access to world-class capital markets, and will also increase the comparability of information, make it more transparent for external users.

Specifically, Russian enterprises will be able to speak the same language with their foreign counterparts and strengthen their business positions in foreign markets in terms of equality of their opportunities, as a result of which numerous prospects for international capital markets will become available.

The introduction of IFRS will have a positive impact on quality, in particular, on its improvement, and will also contribute to the renewal of information systems and staff motivation.

In addition, attracting foreign capital without reporting prepared in accordance with IFRS is currently largely difficult. And it does not matter whether this will be done either with the help of Western banks, or by entering the stock market located abroad, or by attracting private investment from abroad. Most likely, a potential foreign investor will not understand reporting prepared in accordance with PBU. Therefore, it is worth taking care of the formation of reporting regulated by IFRS.

Companies are aware of the fact that in the near future international standards will become national ones. For many firms, IFRS reporting is already required today in order to secure a significant competitive advantage by raising funds in international borrowing markets such as bonds, loans or IPOs.

Thus, all of the above helps to understand the question in more detail: "IFRS - what is it?"

Chapter 5. Main differences between Russian and international financial reporting standards

§ one. Comparative analysis Russian and International Financial Reporting Standards

1.1. Financial reporting principles

While there are strong similarities between the accounting policies permitted under Russian and International Accounting Standards, the use of these options is often based on different underlying principles, theories and objectives. Discrepancies between the Russian accounting system and IFRS lead to significant differences between financial statements prepared in Russia and in Western countries. The main differences between IFRS and the Russian accounting system are related to the historical difference in the final purposes of using financial information. Financial statements prepared in accordance with IFRS are used by investors, as well as other enterprises and financial institutions. Financial statements, which were previously compiled in accordance with the Russian accounting system, were used by government and statistics authorities. Because these user groups had different interests and different information needs, the principles underlying financial reporting have evolved in different directions.

In accordance with the Federal Law "On Accounting", such a task of accounting in Russia was declared as the formation of complete and reliable information about the activities of the organization and its property status, which is necessary for internal users of financial statements - managers, founders, participants and owners of the organization's property, as well as external - investors, creditors and other users of financial statements. The concept of accounting in the market economy of Russia interprets this goal more broadly, focusing on the fact that reporting should, first of all, meet the interests of its internal and external stakeholders for decision-making. Undoubtedly, the recognition of these goals is a significant step towards IFRS, although it should be noted that in practice, reporters pursue other goals, primarily fiscal ones.

For example, one of the principles that are mandatory in IFRS, but not always applied in the Russian accounting system, is the priority of content over the form of presentation of financial information. Under IFRS, the substance of transactions or other events is not always what it appears to be based on their legal or recorded form. In accordance with the Russian accounting system, transactions are most often recorded strictly in accordance with their legal form, and do not reflect the economic essence of the transaction. An example where form takes precedence over substance in the Russian accounting system is the lack of proper documentation for the write-off of property, plant and equipment, which does not give grounds for their write-off, despite the fact that management is aware that such items no longer exist at the stated carrying amount.

The second main principle of international accounting standards, which distinguishes them from the Russian accounting system, and leads to the emergence of multiple differences in financial statements, is the reflection of costs. International Accounting Standards prescribe to follow the compliance principle, according to which costs are recognized in the period of expected income, while in the Russian accounting system, costs are recognized after certain documentation requirements are met. The need for proper documentation often prevents Russian enterprises from accounting for all transactions related to a certain period. This difference results in differences in the timing of accounting for these transactions.

In Russia, accounting principles are formulated in the Federal Law “On accounting" dated November 21, 1996 (in the form of accounting requirements), Accounting Regulations "Enterprise Accounting Policy" (PBU 1/98) (in the form of requirements and assumptions) and "Accounting Statements of the Organization" (PBU 4/99 ), as well as in the accepted Concept of accounting in a market economy. However, there are difficulties with the implementation of the declared principles in practice. This is the main problem that remains unresolved to date.

Table 4 provides a comparative analysis of the conceptual foundations of accounting in international and Russian practice.

Tab. 4. Comparison of financial reporting principles in international practice and in Russia

IFRS	Russian legislation	Source	Comment
I. Underlying Assumptions
1. Accrual method	Assumption of temporal certainty of the facts of economic activity	Concept, clause 4.1; PBU 1/98, p. 6	IFRS uses a different term, the term "accrual method" in Russian practice is used in tax legislation
2. Going concern	Assumption of the going concern of the organization		The Concept does not disclose the need to use and disclose another basis for reporting if the enterprise does not meet the requirement of business continuity
	Assumption of sequence in applying accounting policies	Concept, clause 4.1; PBU 1/98, p. 6; PBU 4/99, p. 9
	Assumption of property isolation of the organization	Concept, clause 4.1; PBU 1/98, p. 6; Federal Law "On Accounting", Art. 8, item 3	This assumption is not included in IFRS.
II. Qualitative characteristics of financial statements
1. Clarity			In Russia, this requirement is not formulated
2. Relevance	Relevance	Concept,
2.1. Character		Concept,	There are no significant differences
2.2. Materiality	Materiality	Concept,	There are no significant differences, in the Order of the Ministry of Finance of the Russian Federation dated July 22, 2003 No. 67n “On the Forms of Accounting Statements”, an amount of 5% of the total may be recognized as significant
3. Reliability	Reliability	Concept, paragraph 6.3.	In IFRS, this characteristic is disclosed in more detail.
3.1. True representation	objective reflection	Concept,	There are no significant differences
3.2. Priority of content over form		Concept, PBU 1/98, p.7.	There are no significant differences
3.3. Neutrality	Neutrality	Concept, clause 6.3.3.; PBU 4/99, p.7	In the Concept, this requirement does not apply to special-purpose reports
3.4. prudence	prudence	Concept, PBU 1/98, p.7	There are no significant differences
3.5. completeness		Concept, clause 6.3.5.; PBU 1/98, item 7; PBU 4/99, p.6	There are no significant differences
4. Comparability	Comparability	Concept, clause 6.4.; PBU 4/99, p.33	There are no significant differences
	Consistency	PBU 1/98, p.7	IFRS does not provide for the requirement of inconsistency, the identity of analytical accounting data to turnovers and balances on synthetic accounting accounts on the last calendar day of each month is ensured through the truthful presentation of information
III. Limitations on Relevance and Reliability of Information
1. Timeliness	Timeliness	Concept, clause 6.5.1.; PBU 1/98, p.7	In PBU, this restriction is formulated as a requirement, and not a limitation on the relevance and reliability of information.
2. Balance between benefits and costs	Balance between benefits and costs, rationality (according to PBU)	Concept,
3. Balance between quality characteristics	Balance between qualitative characteristics, rationality (according to PBU)	Concept,	This restriction in RAS 1/98 is formulated as a requirement of rationality, however, this requirement is not disclosed in detail.
IV. Reliable and objective presentation
Provided through the application of key quality characteristics and accounting standards	Reliable and complete presentation	PBU 4/99, p.6	In the Federal Law "On Accounting" (Article 1, clause 3), one of the tasks of accounting is the formation of complete and reliable information about the activities of the organization and its property status

Summarizing the differences in the basic principles of preparing financial statements in accordance with IFRS and Russian legislation, we can draw the following conclusions:

According to the Law "On Accounting", the main tasks of accounting, in addition to the formation of complete and reliable information, are to provide information necessary to control compliance with the law, compliance with standards and prevent negative results of economic activity;
In Russian practice, there are 2 assumptions that are not provided for by IFRS;
In Russian practice, most of the principles are disclosed in less detail than in IFRS;
The structure of the principles in Russian law does not comply with IFRS (for example, the limitation of relevance and reliability is formulated as a requirement) and is not presented in a logical and consistent manner in any single Russian regulation;
There are differences in terminology.

1.2. Elements of financial reporting

The elements of financial reporting are economic categories that are associated with the provision of information about the financial condition of an enterprise and the results of its activities: assets, liabilities, equity, income and expenses. Their definitions in accordance with IFRS have been given above.

The Accounting Concept of the Russian Federation contains the same list of elements characterizing the financial position as in IFRS, however, the Concept's wording is much shorter than in IFRS, and does not contain explanations and examples.

Unlike the Concept, legislative acts, regulating accounting and reporting in the Russian Federation, there is no definition of the categories "assets", "liabilities" and "capital". The Federal Law "On Accounting" states that the objects of accounting are the property of organizations, their obligations and business operations carried out by organizations in the course of their activities (Chapter 1, Article 1).

In the Accounting Regulations "Accounting Statements of the Organization" (PBU 4/99), there is also no interpretation of the asset and liability of the balance sheet as economic assets and their sources. At the same time, capital is considered as one of the types of liabilities (until recently, the losses of previous years were generally considered in Russian legislation as assets).

Thus, the interpretations of balance sheet elements in domestic regulations do not coincide with their interpretations in IFRS. The only document in which they are close to international standards is the Concept. However, the interpretations of assets, liabilities and capital declared in the Concept are not consistent with the regulations, as a result, there is no mechanism for their implementation in practice.

Financial statements are only recognized if they meet the recognition criteria, i.e. any economic benefit associated with it is likely to be gained or lost by the company, and the item has a value or value that can be measured reliably.

The Russian Concept also specifies the criteria for the recognition of assets and liabilities, but there is no interpretation of the recognition of capital, since there are no articles on the concept of capital and the concept of its maintenance. The criteria for recognition of assets and liabilities in the Concept coincide with the requirements of IFRS. However, they remain proclaimed only in the Concept; in practice, not a single normative act even contains the term “recognition of reporting elements”. Reflection of elements in the balance sheet of Russian financial statements is carried out on the basis of primary documents drawn up in accordance with unified forms. In practice, it is not possible to apply the professional judgment of accountants to determine the likelihood of obtaining or losing economic benefits. Thus, the approach to the recognition of assets, liabilities and capital proclaimed in the Concept, despite its similarity with IFRS, is only declarative.

In accordance with IFRS, financial statements can be valued in accounting using the following methods:

The actual acquisition cost or initial cost;
Current or replacement cost;
Potential sale or redemption value;
Discounted or present value.

The list of possible valuation methods established by the Concept coincides with the list in IFRS, however, their interpretation in the Concept, unlike IFRS, is given only for assets. The Concept does not mention the extension of these methods to obligations. The definition of the present value is absent in the Concept at all, therefore it remains only to assume the analogy of this method in the Concept with the method of the same name in IFRS.

Russian regulations contain various ways estimates for specific balance sheet items, such as, for example, in the Regulations on Accounting and Accounting in the Russian Federation. The most common is the actual cost, although in some cases other estimates are used that are permitted by the legislation of the Russian Federation. It should also be noted the greater degree of regulation of assessments of reporting elements in Russian legislation in comparison with the requirements of IFRS. In many cases, IFRS allows the valuation of balance sheet items based on the professional judgment of the accountant, taking into account the characteristics of the enterprise, the interests of users and the fundamental principles of IFRS. In domestic practice, the assessment of any balance sheet item is carried out strictly in accordance with the requirements of the Regulations. Currently, many of these requirements are much closer to the requirements of IFRS.

The elements reflecting the financial results of the enterprise are income and expenses. Income is an increase in economic benefits during the reporting period, occurring in the form of an inflow or increase in assets or a decrease in liabilities, which is expressed in an increase in capital that is not related to the contributions of equity participants. It should be noted that there is a great similarity in the interpretation of the enterprise's income in the Concept, PBU 9/99 and IFRS.

According to IFRS, revenue is divided into income from ordinary activities (revenue) and other income. IFRS notes the conditional nature of attributing income to one or another group depending on the specific activities of the company and the uniform nature of various income items by economic nature, since they all represent an increase in economic benefits.

Unlike IFRS, the Concept considers the classification of income items briefly, and does not reflect the meaning of the division of income into income from core activities and others. The classification of income items in PBU 9/99 is given in much more detail. Similarly to IFRS in PBU 9/99, income is divided into income from ordinary activities of the company and other. The principle of attributing income to a certain group is the same as in IFRS, based on the nature of the enterprise and its operations. Similarly to IFRS, PBU 9/99 notes the conditionality of classifying income as income from ordinary activities for different enterprises: the same income can be basic for some enterprises and others for others (for example, rent, etc.). In PBU 9/99, other income is divided into three groups: operating, non-operating and extraordinary income, however, their economic essence is not characterized. Instead of a strict definition of the criterion for attributing income to a particular group, PBU 9/99 provides an open list of examples of operating, non-operating and extraordinary income, while the principle of grouping income remains uncertain, which may lead to discrepancies among different users.

The income recognition criteria in IFRS and the Concept are similar. According to PBU 9/99 (clause 12), the revenue recognition criteria include five items that apply to all types of revenue. (The only exception is revenue from the provision of assets for temporary use, for recognition of which only three of the five items are required.). A comparative analysis of these criteria is given in Table 5.

Tab. 5. Criteria for revenue recognition in accordance with IFRS and Russian practice.

PBU 9/99	IAS 18
1) the organization has the right to receive this revenue, arising from a specific contract or otherwise confirmed as appropriate	1) the company has transferred to the buyer the significant risks and rewards of ownership of the goods
2) the amount of revenue can be determined	2) the amount of revenue can be estimated reliably
3) there is confidence that as a result of a particular transaction there will be an increase in the economic benefits of the organization	3) it is probable that the economic benefits associated with the transaction will flow to the company
4) the costs incurred or to be incurred in connection with this transaction can be determined	4) the costs incurred or expected associated with the transaction can be estimated reliably
5) the right of ownership (possession, use and disposal) of the product (goods) has passed from the organization to the buyer or the work has been accepted by the customer (the service has been rendered)	5) the company no longer participates in management to the extent normally associated with ownership and no longer controls the goods sold

In general, these definitions are similar, although with respect to the first criterion it should be noted that the points of transition of significant risks (IFRS) and the transition legal rights(Russian practice) may vary. PBU does not provide for an analysis of significant risks associated with the ownership of goods.

The criteria for including expenses in reporting in IFRS and the Concept are comparable. The Concept contains an additional condition on the independence of the recognition of expenses from the taxable base. PBU 10/99 includes all the requirements for the recognition of expenses set forth in the Concept, however, in addition to these requirements, the PBU contains an additional condition that “expenses are recognized in accounting under the following conditions: the expense is made in accordance with a specific contract, the requirement of legislative and regulatory acts , business practices. That is, unlike IFRS, an expense cannot be recognized solely on the basis of an accountant's professional judgment about the decrease in economic benefits and must be documented. Paragraph 18 of the PBU contains the possibility of recognizing expenses on a cash basis, which is not in line with IFRS.

Thus, despite the noticeable convergence of IFRS and Russian standards, some problems still remain unresolved, such as, for example, strict regulatory regulation of many issues of accounting for the financial results of an enterprise. Despite statements about the independence of the presentation of financial results in reporting from taxation purposes, in practice, the fiscal orientation of accounting remains. Thus, significant problems remain today regarding the reflection of the elements of financial statements in accordance with IFRS.

1.3. Composition of financial statements

Table 6 compares the composition of the financial statements that organizations must provide in accordance with IFRS and Russian legislation.

Tab. 6. Composition of financial statements under IFRS and Russian legislation.

IFRS	Russian legislation
Balance sheet	Balance sheet (form No. 1)
Profits and Losses Report	Profit and loss statement (Form No. 2)
Statement of capital movements	Statement of changes in equity (Form No. 3)
Cash flow statement	Cash flow statement (Form No. 4)
	Appendix to the balance sheet (form No. 5)
	Report on the targeted use of funds received (Form No. 6)
Accounting policy and explanatory note	Explanatory note
	An auditor's report confirming the reliability of financial statements, if they are subject to mandatory audit

The structure of the reporting according to the Russian legislation is given according to statutory acts of the Ministry of Finance of the Russian Federation. It should be noted that the Federal Law "On Accounting" provides for the following composition of financial statements:

balance sheet;
Profits and Losses Report;
annexes to them provided for by regulatory enactments;
an auditor's report confirming the accuracy of the organization's financial statements, if it is subject to mandatory audit in accordance with federal laws;
explanatory note.

Thus, the federal legislation considers the statement of changes in equity and the statement of cash flows as part of the appendices to the balance sheet and income statement.

An interesting fact is the inclusion of an audit report in accordance with Russian standards in the financial statements. Many experts emphasize the incorrectness of such an inclusion, since it turns out that the audit report should contain an opinion, including about oneself.

It is necessary to note the difference in terminology: international standards are financial reporting standards, while in Russian practice, reporting is called accounting.

The issue of compliance with IFRS requires special attention. Financial statements comply with IFRS if they are prepared in accordance with all standards and interpretations, if necessary. The fact of compliance with IFRS should be reflected in the financial statements. At the same time, compliance with IFRS means that the reporting meets all the requirements of each applicable standard. Conversely, financial statements cannot be characterized as compliant with IFRS if there are any significant departures from the standards and interpretations regarding accounting and disclosure. The presence of national standards that are contrary to IFRS, as well as the disclosure of accounting policies and the inclusion of relevant explanations in the financial statements are not considered to justify deviations from IFRS requirements.

However, it is envisaged that in exceptional situations it may be necessary to derogate from IFRS. Such situations arise when the application of international standards can lead to distortion of information about individual business transactions. In this case, the financial statements must contain:

the opinion of the company's management on the need for deviations from IFRS;
a detailed explanation of the reason why the application of these standards may lead to misreporting;
a description of the rule prescribed by IFRS and the accounting scheme actually used;
assessment of the impact of this deviation on the value of assets, liabilities, capital, profit (loss) and cash flows for each period presented in the statements.

Knowing all the facts of deviations from IFRS allows the user to form their own opinion on the financial statements and calculate the amount of adjustments necessary to bring the financial statements in line with IFRS. An important role in the implementation of the described rule belongs to the auditors, who are required to express an opinion whether the financial statements are really prepared in accordance with IFRS, i.e. make sure and confirm that the reporting meets all the requirements of each individual standard.

In addition, IFRS establish a fairly strict approach to the choice of accounting policies. In this process, the company should be guided by the rules prescribed by IFRS. In the absence of such for individual transactions, the company's management develops an accounting policy, using which the financial statements will contain complete and unbiased information necessary for users to make decisions, faithfully reflecting the results of the company's activities and position, as well as the economic substance of the transactions (and not their legal form) . In the absence of specific requirements for individual transactions, it is necessary to focus on the requirements adopted for similar transactions and the general principles of the IFRS system. It is also acceptable to use industry accounting rules and standards issued by other bodies, but only to the extent that their requirements do not conflict with IFRS. This makes it possible to apply, in particular, US GAAP, since the latter contain detailed accounting rules for many complex transactions.

The approach adopted in IFRS is intended to eliminate an overly broad interpretation of the standards, as well as situations where the published financial statements contain an indication that they are prepared in accordance with IFRS, although in fact not all the requirements of the standards are met. Most often, these situations arise in relation to disclosure requirements (transactions with related parties, geographic and operating segments).

1.4. Balance sheet

International standards do not provide for any standard form of balance sheet and only define the range of mandatory balance sheet items:

fixed assets;
intangible assets;
financial assets;
investments accounted for under the participation method;
reserves;
trade and other receivables;
cash and cash equivalents;
debts of buyers and customers and other receivables;
tax liabilities;
reserves;
long-term liabilities, including interest payments;
minority share;
issued capital and reserves.

In Russia, the form of the balance sheet is fixed by law (Order of the Ministry of Finance No. 67 of July 22, 2003 “On Forms of Accounting Statements”). There are a number of differences in the disclosure of balance sheet items, which are summarized below.

The key differences for fixed assets relate to depreciation. In accordance with international accounting standards, the company's management is allowed to independently determine the life of fixed assets, depending on how long the company intends to use them. Although PBU 6/01 “Accounting for Fixed Assets” also states that the organization itself determines the useful life of fixed assets, in practice, organizations for accounting purposes continue to use depreciation rates established by Decree of the Council of Ministers of the USSR dated October 22, 1990 No. 1072 “ On the unified norms of depreciation deductions for the full restoration of fixed assets of the national economy of the USSR. In connection with the adoption of Chapter 25 of the Tax Code, many enterprises use a new classification of fixed assets established by Decree of the Government of the Russian Federation dated January 1, 2002 No. 1 “On the classification of fixed assets included in depreciation groups”, i.e. preference is given to tax accounting. Differences in useful lives result in discrepancies in the residual value of assets, as well as in the amount of depreciation accrued for a certain period, presented in accordance with the Russian accounting system and IFRS. In accordance with PBU 6/01 “Accounting for fixed assets”, depreciation can be carried out in one of four ways of depreciation charges:

linear way;
decreasing balance method;
method of writing off the cost by the sum of the numbers of years of the useful life;
method of writing off the cost in proportion to the volume of products (works).

IFRS 16 Property, Plant and Equipment provides for three methods:

uniform accrual;
diminishing balance;
sum method.

However, in practice, Russian enterprises again mainly use the straight-line method prescribed by the Tax Code.

An important difference is that Russian accounting does not use regular analysis of assets for their impairment, while IAS 36 “Impairment of Assets” is applied to a large number 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 (decrease in value, value) when the net book value exceeds the recoverable amount. The loss is recognized in the income statement for the reporting period, and if the asset was previously revalued, it is attributed to the reduction of the revaluation reserve. IAS 36 provides for a number of possible indicators of impairment that an entity should test for at each reporting date using a range 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 depreciation of fixed assets based on the results of revaluation, while the amount of the depreciation is credited to the account of retained earnings (uncovered loss) or to the reduction of the additional capital of the organization formed from the revaluation of this object, carried out in previous reporting periods. However, Russian standards do not aim to regularly review assets for impairment and recognize losses in the reporting year.

The definitions of intangible assets in accordance with IAS 38 "Intangible Assets" and RAS 14/2000 "Accounting for Intangible Assets" are generally consistent with each other, although there are some differences. The first is that, according to PBU, intangible assets (IA) must be used for a long time, i.e. have a useful life of more than 12 months. IFRS, on the other hand, does not provide for 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 the PBU, in order to recognize intangible assets, it is necessary to have properly executed documents confirming the existence of the asset itself and the organization’s exclusive right to the results of intellectual activity (patents, certificates, other titles of protection, an assignment (acquisition) agreement of a patent, sign, etc.). IAS 38 does not require legal rights because the main criterion is the ability to control future economic benefits from the use of intangible assets, since the entity may otherwise control those benefits (IFRS 38.13).

As a result of the inconsistency of definitions, there are a number of differences in the recognition of certain objects of intangible assets in accounting. For example, PBU 14/2000 classifies organizational expenses as intangible assets. In accordance with IFRS 38, organizational expenses are not recognized as intangible assets, because they are not directly related to obtaining economic benefits from them. Despite the fact that the costs of establishing an organization are made in order to obtain future economic benefits, there is no real probability of receiving them at the time of the company's creation - the company may turn out to be unprofitable, for example.

In the Russian system of accounting, assets created by the enterprise itself, such as the value of its own created software, "know-how", the exclusive right to a trademark can 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 intangibles at all, as their costs cannot be distinguished from the costs of developing the company as a whole.

PBU 14/2000 classifies the business reputation of an organization as intangible assets. IAS 38 distinguishes between internally generated goodwill and goodwill arising in a business combination. Goodwill is not recognized as an intangible asset and is not recorded as an asset at all, since it is not an identifiable resource and cannot be measured reliably. Goodwill as an asset arises and is reflected in the accounting only when buying another company as a whole as a property complex. In this case, the organization attaches 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 is goodwill. Although IAS 38 explicitly requires goodwill to be reported as a depreciable asset, goodwill is shown as a separate line item under non-current assets. Unlike IAS 38, PBU 14/2000 does not distinguish between internally created and acquired goodwill.

Another important issue is the cost accounting for research and development work. Research work - original and planned research carried out in order to obtain new scientific or specialized knowledge. Development work - the application of the results of scientific research or other knowledge in the development of a plan or design for the production of new or significantly improved materials, devices, products, technologies, systems or services, before commercial production or use. According to IFRS, research and development expenses must be accounted for as an expense in the period in which they are incurred, unless the following conditions are met (in such cases they must be treated as intangible assets):

the technical feasibility of the product or process can be demonstrated;
the company intends to produce, sell or use the product or process;
a market for the product or process can be demonstrated, or if it is intended for internal use rather than for sale, its usefulness to the company;
sufficient resources exist, or their availability can be demonstrated, to complete the project, sell or use the product or process;
the costs attributable to a product or process can be estimated reliably.

In Russian accounting, R&D costs can be capitalized both for R&D and R&D if there is a positive result. Since the presence of a positive result does not unequivocally mean the possibility of using or selling the results of research and development, it is necessary to recognize a significant difference in the qualification of these objects in Russian accounting from the requirements of IFRS. Therefore, when preparing financial statements in IFRS format, those costs should be written off as expenses of the relevant period that do not fall within the definition of research and development costs under IFRS.

Also, Russian legislation does not yet have any clearly defined procedures for accounting for mergers of companies (purchase and merger of interests) and for reflecting the positive or negative business reputation (goodwill) that arises in this case. According to PBU 14/2000, goodwill is the difference between the purchase price of an organization and the balance sheet value of all its assets and liabilities. Goodwill is defined under IAS 38 as the excess of the acquisition cost of the acquiree over the fair value of the acquired assets and liabilities. Fair value under international standards is the amount for which an asset could be exchanged in a transaction between knowledgeable, willing parties. The fair value of an asset may differ materially from its carrying amount. Thus, the difference between the fair and book value of the assets and liabilities of the acquired organization leads to different estimates of the value of goodwill in Russian and international standards.

Similar to fixed assets, Russian accounting does not provide for a regular analysis of intangible assets for possible impairment (IFRS 36). Also, the list of information disclosed in IFRS reporting is wider than in Russian accounting.

Thus, in relation to intangible assets, there are differences between Russian and international standards in almost all indicators. 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 are one of the most complex accounting items, their intangibility, problems with identification and evaluation can lead to ambiguous interpretations of reporting.

There are a number of differences when accounting for inventories. Inventory accounting is governed by IFRS 2 "Inventories" and RAS 5/01 "Inventory Accounting". PBU 5/01 prescribes to evaluate the inventory at the actual cost. And at the end of the reporting period, inventories should be revalued: “Inventories that are obsolete, have completely or partially lost their original quality, or the current market value, the sale price of which has decreased, are reflected in the balance sheet at the end of the reporting year, minus reserve for depreciation of material assets. Based on this definition, it is somewhat unclear how inventories should be valued, the price of the possible sale of which in one reporting period was lower than the actual cost, and in the next reporting period increased above the actual cost. Under IFRS 2, inventories must be measured at the lower of cost and net realizable value, which is the lower of cost. At the same time, in accordance with IFRS, the possible selling price is calculated net of selling expenses (which is not provided for in RAS).

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 of a unit of inventory. The cost of inventories (except for goods in trade accepted for accounting at sales prices and IBE) under Russian law can be made in the following ways:

at the cost of each unit;
at an average cost;
at the cost of the first in time acquisition of inventories (FIFO method);
at the cost of the most recent acquisition of inventories (LIFO method).

Unlike Russia, international practice provides for 3 methods:

FIFO method (basic accounting procedure);
Weighted average method (basic accounting procedure);
LIFO method (permissible alternative accounting treatment).

The LIFO method will soon be phased out as part of the IASB's Standards Improvement Project.

Investments can be classified as short-term or long-term. Current investments by their nature are easily realizable and are designed for a period of not more than one year. Long-term investments are investments with a maturity of more than one year. The Russian accounting system requires that both current and long-term investments be presented on the balance sheet at cost. In contrast, international accounting standards allow long-term investments to be accounted for depending on their nature:

at cost (i.e. including acquisition costs such as brokerage and bank fees, royalties, fees);
at a revalued cost;
at the lower of the two values: cost and market value.

In accordance with international accounting standards, short-term investments may be carried on the balance sheet at market value, or at the lower of cost and market value (ie the amount that would be received from the sale of the investment in the stock market). The resulting profit (loss) should be recognized in the income statement.

In the event of a decrease in the value of a long-term investment that is estimated not to be short-term, its carrying value is reduced. Such decline in the value of long-term investments, other than temporary declines, is recognized in the income statement. An increase in the carrying amount of long-term investments arising from the revaluation of long-term investments should be credited to the revaluation change in the value of investments under equity. To the extent that a decrease in the value of an investment offsets a previous increase in the value of the same investment that was credited to the revaluation change in investment account and not subsequently reversed, that decrease is credited to the revaluation change in investment account. In all other cases, the decrease in the carrying amount must be recognized as an expense.

There are differences in the approach to creating a provision for doubtful receivables. 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 the creation of provisions only in relation to specific debt. IFRS allow for the possibility of creating a general provision for all receivables, for example, as a percentage of net sales. In practice, when reporting by Russian enterprises in accordance with IFRS, the allowance for doubtful debts is a very significant percentage and significantly reduces profit indicators.

1.5. Profits and Losses Report

International Accounting Standards prescribe to follow the compliance principle, according to which costs are recognized in the period of expected receipt of income, and in the Russian accounting system, costs are recognized after certain documentation requirements are met. The requirement for proper documentation often prevents Russian enterprises from accounting for all transactions relating to a particular period. The fundamental principle of IFRS, which is that the content of financial statements is more important than the form of presentation of information or its extraction, is in conflict with the provision that there must be sufficient documentation to reflect the transaction. The difference in the timing of accounting for transactions for which there is not sufficient documentation in accordance with the Russian accounting system leads to numerous discrepancies between IFRS and the Russian accounting system in the income statement. The most common example of a discrepancy is that many Russian enterprises recognize revenue not by the date of shipment, but by the date of the invoice, which can be issued 2-3 weeks after the date of shipment (when, for example, the price of products is calculated based on some indicator for the period before and after the invoice date).

One of the significant differences in the approach to the income statement in Russia and international practice was eliminated during the reform. As you know, until recently, the moment of product sale could be taken as the moment of payment for the product or the moment of its shipment, and the vast majority of enterprises used the first, so-called "cash" method of accounting. Since January 1, 1996, in accounting, the moment of sale of products is determined, as a rule, only by the moment of shipment, as in international practice.

Another difference between the new Russian format of the income statement and the IFRS income statement is the reflection of depreciation and labor costs. Under IFRS, if companies disclose their income statement using the “by cost method”, i.e. on the functional basis of expenses (the most widely used in practice), they must additionally disclose data on depreciation and labor costs. In Russian practice, these expenses are disclosed in the Appendix to the balance sheet (Form 5).

It is also necessary to highlight some differences in the composition of the cost of goods sold. In accordance with IFRS, selling expenses and, in general, general business expenses (depreciation of administrative buildings, expenses for the maintenance of the administrative apparatus, support services) are not considered as directly related to the acquisition and production of goods, and, therefore, are not included in the cost of production. In accordance with the Russian accounting system, selling and general expenses may be included in the cost of goods sold, if this is required by the accounting policy. Therefore, for example, the entry for writing off general business expenses to the cost of production (debit 20 - credit 26) is not entirely correct, and it is necessary to make adjustment entries, disclosing these expenses separately. Separate attention should be paid to the reflection of taxes, except for income tax, in the income statement. In Russia, these taxes are usually included in separate lines: for example, customs duties, road user tax (now abolished) are shown under management or selling expenses, while property tax and advertising tax are usually included in other expenses. Also, the Russian income statement does not include export customs duties (they are excluded from revenue and costs) and excises, so that users of the statements are unable to estimate the amount of duties, which can be very significant for some companies. According to IFRS, excise taxes are shown separately as part of revenue, duties may also be shown as part of revenue, if this is required by the accounting policy.

Of great theoretical and practical interest is the accounting of barter. Barter plays a much more important role in the Russian economy than on an international scale. For example, the share of barter in the proceeds of RAO "UES of Russia" in 2002 was 22%. According to IFRS, if goods or services are exchanged for other goods or services of the same and similar value, such a transaction is not recognized as a sale. This situation occurs when suppliers exchange goods, moving them between different regions in order to respond in a timely manner to local changes in demand (for example, mutual deliveries of petroleum products). In cases where there is an exchange of dissimilar goods, for example, trucks are exchanged for rolled steel, revenue should be measured at the fair value of the goods (services) received, adjusted for the amount of cash or cash equivalents transferred. If it is impossible to estimate the fair value of the goods (services) received, the revenue is measured at the cost of the goods (services) transferred, adjusted for the amount of cash or cash equivalents transferred. In the Russian accounting system, barter transactions are always considered as sales, and the case of the exchange of homogeneous and dissimilar goods is not considered. Therefore, when exchanging goods for similar goods, such transactions should be excluded from sales determined in accordance with international standards.

In accordance with Russian standards, income and expenses received and incurred on various transactions are reflected on a gross basis: transactions with securities, materials, fixed assets, exchange and sum differences, taxes payable, fines and penalties payable or receivable, etc. d. According to IFRS 1 (paragraph 36), revenue and expenses from non-core activities must be shown on a net basis. Therefore, for the purposes of transforming financial statements, it is necessary to obtain a breakdown of the indicated lines by types of expenses and incomes and, in a collapsed manner, show only those incomes and expenses that relate to the same operations: as a rule, this applies to operations for the sale of fixed assets, materials, as well as to exchange rate and sum differences.

1.6. Cash flow statement

The income statement in international practice is prepared in accordance with IFRS 7 “Statements of cash flows”, in Russia - in accordance with the Order of the Ministry of Finance of the Russian Federation dated June 28, 2000 N 60n “On methodological recommendations on the procedure for the formation of financial statements of an organization”. To conduct business, fulfill obligations and ensure profitability, the company needs cash. The ability to generate cash flows is the most important indicator of financial condition. The cash flow statement provides information that allows you to evaluate these indicators, as well as understand changes in the company's net assets, its financial structure (including liquidity and solvency), the ability to manage the timing and density of cash flows in the face of constantly changing external and internal factors . The inclusion of a cash flow statement in the financial statements allows the modeling of the present value of future cash flows for the comparative valuation of companies.

In accordance with IFRS 7 Statements of Cash Flows, the cash flow statement reflects changes not only in cash, but also in cash equivalents. Cash equivalents are short-term and highly liquid investments that are freely convertible into a known amount of cash with little risk of fluctuations in value. Investments recognized as cash equivalents are kept on the balance sheet not so much to receive investment income or control over the activities of the investee, but to ensure the fulfillment of short-term obligations. This is a kind of money management technique. Cash equivalents are investments with a short maturity, typically less than three months to maturity. With longer maturities, the corresponding investments usually do not meet the requirement of insignificant risk of value fluctuations.

In Russian practice, there is no concept of cash equivalents. The rules for compiling a cash flow statement refer to cash held in the organization's cash desk, on settlement, currency and special accounts. Short-term deposits with banks are included in short-term financial investments. There is no requirement to disclose restrictions on the use of reported cash and the composition of cash.

There are significant differences in the methods of preparing information - Russian rules provide only a direct method (cumulative total since the beginning of the year), while IFRS - direct and indirect. The indirect method is more common in world practice as a method of compiling a cash flow statement. It includes elements of analysis, as it is based on a comparison of changes in various balance sheet items for the reporting period, characterizing the property and financial position of the organization, and also includes an analysis of the movement of fixed assets, their depreciation and other indicators that cannot be obtained solely from the balance sheet data. . As a result of applying the indirect method financial results(net profit) of the organization for the period is converted into the difference between the amounts of funds at the disposal of the organization as of the beginning and end of the reporting period. It should be noted that when preparing consolidated financial statements, the direct method is of little use, since requires large expenditures to obtain the necessary information for each of the consolidated enterprises.

According to IFRS, when cash flows are recorded in a foreign currency, their value is recalculated into the reporting currency at the exchange rate adopted on the date of the cash flow. According to Russian standards, in the event of the availability (movement) of funds in foreign currency, first a calculation is made in foreign currency for each of its types. After that, the data of each calculation, drawn up in foreign currency, are recalculated at the rate of the Central Bank of the Russian Federation as of the date of preparation of the financial statements. The data obtained for individual calculations are summarized when filling in the corresponding indicators of the report.

There are differences in how data is classified by activity. In accordance with IFRS 7, financing activities are activities that result in a change in the amount and composition of the company's equity and borrowings, and investing activities are the acquisition and sale of long-term assets and other investments that are not related to cash equivalents. According to Russian standards, investment activity is an activity related to capital investments of an organization in connection with the acquisition of land plots, buildings and other real estate, equipment, intangible assets, other non-current assets, as well as their sale; with the implementation of long-term financial investments in other organizations, the issuance of bonds, other long-term securities, etc. Financial activity is the activity of an organization related to the implementation of short-term financial investments, the issuance of bonds, other short-term securities, the disposal of previously acquired shares, bonds, etc. for up to 12 months. Based on the considered definitions, cash receipts in Russian practice when issuing short-term bonds are classified as financial activities, and long-term - as investment. In IFRS, funds raised from the issue of bonds are classified as financing activities.

Table 7 shows the main differences in approaches to the classification of activities.

Tab. 7. Classification of certain types of income statement activities under IFRS and Russian standards.

Flow of funds	IFRS	Russian practice
Receipts from owners (shareholders) in the form of deposits	Financial
Payment of dividends to owners	Financial	Investment
Proceeds from owners (shareholders) of a strictly targeted nature of use	Financial	Investment
Receipt and repayment of long-term loans and loans (including bonds) of a targeted nature, as well as payment of interest on them	Financial	Investment
Receipt and repayment of short-term credits and loans (including bonds) of a targeted nature, as well as payment of interest on them	Financial	Financial
Receipt and repayment of short-term credits and loans (including bonds) that do not have a strictly targeted character	Financial

Thus, in relation to the cash flow statement, there are also significant differences between Russian and international financial reporting standards.

1.7. Other differences

Consolidated (consolidated) reporting. One of the key differences between IFRS and the Russian accounting system is the differences in the preparation of consolidated or consolidated financial statements. The term "consolidated" is used in IFRS, "consolidated" - in Russian legislation. The need for the preparation of consolidated financial statements is provided for by the Regulations on Accounting and Accounting in the Russian Federation (Order of the Ministry of Finance of Russia dated July 29, 1998 N 34n). It states that if the organization has subsidiaries and affiliates, in addition to its own accounting report, a consolidated financial statement is also prepared, including the indicators of the reports of such companies located on the territory of the Russian Federation and abroad, in the manner established by the Ministry of Finance of Russia.

This order has been established methodological recommendations for the preparation and presentation of consolidated financial statements (approved by Order of the Ministry of Finance of Russia dated December 30, 1996 N 112). Clause 1.3 of the recommendations defines three conditions under which the financial statements of a subsidiary are included in the consolidated financial statements:

the parent organization owns more than fifty percent of the voting shares of a joint-stock company or more than fifty percent of the charter capital of a limited liability company;
the parent organization has the ability to determine the decisions made by the subsidiary in accordance with the agreement concluded between the parent organization and the subsidiary;
if the parent organization has other ways of determining the decisions made by the subsidiary.

An enterprise may not compile consolidated financial statements if the following conditions are simultaneously met:

consolidated financial statements are prepared on the basis of IFRS;
The Group has ensured the reliability of the consolidated financial statements prepared on the basis of IFRS;
the explanatory note to the consolidated financial statements contains a list of applicable accounting requirements, discloses accounting methods, including estimates that differ from the rules provided for by regulations and methodological guidelines for accounting of the Ministry of Finance of the Russian Federation.

IFRS are focused primarily on the preparation of consolidated financial statements, because only consolidated financial statements ensure the fulfillment of the main goal of reporting - the provision of reliable and objective information about the financial position of the company, the financial results of its activities and changes therein. It is the consolidated reporting that gives a clear idea of what assets are actually controlled by certain shareholders, taking into account subsidiaries. As a rule, individual financial reporting is primarily required for regulators.

The Russian recommendations do not address a number of important issues that arise in the preparation of consolidated financial statements. The Ministry of Finance of the Russian Federation considers one of its primary costs to develop a PBU for consolidated reporting, which should eliminate most of the existing differences.

Under IAS 22 Business Combinations, there are two methods of accounting for a business combination: the acquisition method, which identifies the acquirer, the purchase price, and allocates the determined cost to identifiable assets and liabilities, and the pooling of interests method, which is applied in those rare situations where the acquirer does not can be defined. The choice of method does not depend on the legal form of the transaction. For example, in a reorganization in the form of a merger of two independent companies, the purchase method is applied if, in essence, this transaction is a purchase and meets the definition provided by IFRS. In the Russian rules, the issues of combining the activities (business) of two or more companies have not yet been developed. At the same time, it should be noted that the IASB plans to abolish the pooling of interests method as part of a project to improve the quality of IFRS. Obviously, in order to develop a Russian PBU, it will be necessary to analyze these changes, which will be made in the near future.

According to the recommendations (Order of the Ministry of Finance of Russia dated December 30, 1996 N 112, paragraph 1.8), some parent companies may not prepare consolidated financial statements in cases that are not provided for in IFRS. The Russian standards do not contain rules for the consolidation of so-called specialized companies. This issue is currently very relevant in view of the widespread use of such companies. As a rule, specialized companies are offshore companies created to carry out complex financial transactions. Manipulation in reflecting such transactions was widely used in the cases of Enron and Parmalat. The IASB and the US Financial Accounting Standards Board are currently working on revising the accounting standards for specialized companies.

According to Russian rules, the valuation of the parent organization's participation in a subsidiary that is a bank or other credit institution may be reflected in the consolidated financial statements in the manner established for the reflection of investments in a dependent company. The validity of this is confirmed by an independent auditor. That is, if the Group includes a bank (and this is a very common occurrence for large industrial groups), then its results are not consolidated into the results of the Group on a general basis. According to IAS 27, the exclusion of a subsidiary from consolidation due to the fact that its activities differ from the activities of other group companies is unjustified, since the financial statements of subsidiaries and disclosure of additional information about various types their activities in the consolidated financial statements provide better information.

Accounting for inflation. Under IAS 29, Financial Reporting in Hyperinflationary Economies, the financial statements of an entity reporting in the currency of a hyperinflationary economy must be presented in units of measurement in effect at the reporting date. That is, information for the reporting period and comparative data for prior periods are restated to reflect changes in the overall purchasing power of the currency in which the financial statements are denominated.

Signs of hyperinflation:

The majority of the population prefers to keep their savings in non-monetary form or in a relatively stable foreign currency. Funds in local currency are immediately invested to maintain purchasing power;
The majority of the population does not express money in local currency, but in a relatively stable foreign currency. Prices may be quoted in this foreign currency;
Sales and purchases on credit are made at prices that compensate for the expected loss of purchasing power during the term of the credit, even if this period is short;
interest rates, wage and prices are linked to a price index;
Three-year cumulative inflation approaches or exceeds 100%.

Until 2003, Russia met these criteria, and accordingly, the reporting had to be adjusted in accordance with the requirements of IFRS 29. In 2000-2002. the inflation rate (calculated on the basis of the consumer price index) was 20.1%, 18.8% and 15.1%, respectively. Thus, for 3 years inflation was 64.3%. Other signs of hyperinflation also do not fully correspond to the state of the Russian economy. This means that starting with 2003 financial statements, IFRS 29 may not apply to Russian companies.

Russian rules do not provide for the adjustment of accounting data for inflation, which is one of the reasons for its incompatibility with IFRS, there is no requirement to recalculate the financial statements of subsidiaries denominated in the currency of a country with a hyperinflationary economy.

Accounting for exchange rates. In Russia, the accounting procedure for foreign currency transactions is defined in PBU Accounting for Assets and Liabilities Denominated in Foreign Currency (PBU 3/2000), in IFRS it corresponds to IFRS 21 The Effect of Changes in Foreign Exchange Rates. There are several major differences between these standards.

According to PBU, transactions in foreign currency are converted into rubles at the official exchange rate of the Bank of Russia, IFRS does not specify at what rate the transaction should be recalculated (that is, it allows the use of an average rate).

IFRS provides an acceptable alternative way of accounting for exchange differences that arise from a significant depreciation of a currency that affects the amount of liabilities arising from the recent acquisition of foreign currency assets. Such exchange differences must be included in the carrying amount of the asset, subject to certain conditions. PBU 3/2000 does not stipulate such cases in any way.

PBU 3/2000 specifically stipulates the procedure for accounting for exchange rate differences associated with the formation of authorized (share) capital. Such exchange differences should be attributed to the "Additional capital" account.

IFRS provides for a special currency translation procedure in relation to the financial statements of foreign subsidiaries included in the consolidated financial statements. To do this, it is necessary to recalculate all the assets and liabilities of the company at the final rate, and items of expenses and income - at the rate as of the date of the transaction. The resulting exchange differences should not be charged to expenses or income of the reporting year, but to the equity capital of the company until the net investment is realized. This procedure is not provided for in PBU 3/2000.

§ 2. Problems of transformation of Russian reporting in accordance with IFRS

The transformation of financial statements in accordance with the requirements of IFRS is becoming increasingly relevant. However, it should be noted that there is no single methodology for the transformation of reporting. According to experts, reporting in accordance with IFRS can be obtained in 3 ways: the method of transformation of reporting, the method of translation of transactions and the method of parallel accounting.

The first two methods are the simplest, however, they can give an error of 10% to 50%. As a rule, they are based on the construction of special transformation tables for the main areas of accounting. For example, when compiling the consolidated financial statements of RAO "UES of Russia" for 1998, 28 such tables were developed. There are five main transformation tables:

Summary table of ruble corrective (transformation, corrective) entries;
Summary table of currency adjusting entries;
Summary table of balance transformation;
Summary table of corrective entries for the regrouping of income statement items;
Summary table of income statement transformation.

The tables are transcripts of financial statements prepared on the basis of Russian standards in a form that allows you to automatically make a number of amendments to bring data into an international format.

The main methods used in the transformation of reporting:

Itemization of balances is necessary for the correct classification of balances for the purposes of IFRS (for example, classes of fixed assets), the allocation of intra-group balances eliminated during consolidation.
Reclassification of balances - represents the distribution of Russian accounting data in IFRS format (for example, highly liquid investments are reclassified to cash equivalents);
Revaluation of balances - adjustment of balance sheet accounts, entailing simultaneous changes in equity: profits and losses of the reporting year, retained earnings (accumulated loss), additional capital and other equity items (for example, write-offs of illiquid reserves or inflation adjustments).

The disadvantages of this method of transformation, in addition to possible errors, it should be noted that information prepared in accordance with IFRS can be obtained only at the end of the period, and after the completion of the main transformation process, “manual” adjustments have to be made.

Parallel accounting (otherwise it is called the method of double accounting) is carried out using special software. To maintain parallel accounting, the system uses two working charts of accounts: Russian and international. When setting up standard transactions, both Russian and international posting templates are recorded. The entered operations are automatically posted to different modules, which gives the maximum detail of information. At the same time, it is necessary to take into account a number of features in the automated transformation of financial statements.

different degree of detailing of the Russian and international charts of accounts;
various methods and norms of depreciation of fixed assets;
peculiarities in documentary recognition of debt and cash (for example, according to Russian standards, cash accounts are updated on the basis of a bank statement, and according to IFRS - on the basis of payment orders);
setting up operations when accounting in two currencies.

Since the list of differences between Russian accounting and IFRS related to the transformation of financial statements is still significant, this problem requires special attention from a wide range of accountants and consultants.

The principles and standards of accounting are necessarily present in any accounting system - it is impossible to competently and standardize systematic accounting in the absence of basic concepts and rules.
As you know, in the Russian system, accounting principles are currently set out in the Federal Law "On Accounting", and accounting standards are described in accounting regulations (PBU). In Western accounting systems, everything looks a little different. Therefore, it is necessary to start by comparing the principles and standards in the international and Russian systems.

The beginning of the process of formation of international accounting standards was laid in the USA in the 60s. of the last century, when justified and reflecting practical tasks began to be introduced into practice general accounting principles (Generally Accepted Accounting Principles- abbreviated GAAP), which can be translated into Russian as "Generally Accepted Accounting Principles". This approach to the formation legislative framework bookkeeping has greatly facilitated the work of all the financial authorities of this large country.

Eleven basic principles (concepts) accounting formed the basis of the GAAP system. There are currently over fifty. Not only American accounting is based on these principles, but also most of Western systems accounting.
Subsequently, there was a need to develop and implement international standards that would be accepted by all countries for complete mutual understanding in the economic sphere. This was also required by the significant growth of economic ties in the modern world.

From 1973 to 2001, such international standards were developed by the International Accounting Standards Committee (IASC) and issued under the name International Accounting Standards (IAS). In 2000, the committee was reformed and the International Financial Reporting Standards Board (IASB) was established as part of the committee, which took over the standards development function. New standards began to come out under the name IFRS (International Financial Reporting Standards), i.e. International Financial Reporting Standards, and replace obsolete standards. Thus, in order to standardize the approach, both types of these standards are currently called International Financial Reporting Standards (IFRS) in international practice.

Speaking about the structure of international standards, they include:

chapter " Transparency of financial reporting", which characterizes the concept of "transparency" as the creation of an environment in which information about existing conditions, decisions and actions is made available, visible and understandable to all market participants. The same section formulates certain restrictions on transparency associated with the concept of a trade secret ;
"Principles for the preparation and disclosure of financial statements";
directly International Financial Reporting Standards (IAS and IFRS);
interpretations(clarifications) of certain provisions of IFRS issued by the Standing Interpretations Committee (SIK/SIC).

The Principles for the Preparation and Disclosure of Financial Statements define the basis and objectives for the preparation of financial statements, the composition of users of these statements, as well as the qualitative characteristics of financial statements and the main assumptions in their preparation.

In order for the information to be used in international level, it must meet the following quality characteristics:

intelligibility(understandability) information means that it is understandable to users with sufficient knowledge in the field of accounting. It should be noted that information about complex matters requiring disclosure in the financial statements should not be excluded simply because it may not meet the requirement of understandability for some users;
relevance or significance(relevance) of information suggests that it will influence the economic decisions of users. The relevance of information is determined by its nature and materiality. In some cases, the nature of the information is sufficient for its disclosure, regardless of materiality. In other cases, materiality is of great importance when the omission or misrepresentation of information can affect the economic decisions of users of statements;
reliability or authenticity(reliability) information takes place if it does not contain significant errors and distortions and is impartial. Reliable information must meet the following requirements:
truthful representation(faithful representation) - information must truthfully disclose business transactions in the financial statements;
priority of content over form(substance over form) - information should take into account, first of all, the economic essence of the facts of business transactions, and not the legal form;
neutrality(neutrality), i.e. non-targeting of information on the interests of certain user groups;
prudence(prudence) - this is a very important requirement, which is a conservative assessment of assets and liabilities. Assets and incomes should not be overestimated, while liabilities and liabilities should not be underestimated, i.e. assets are stated at the lowest possible valuation, and liabilities at the highest. In other words, potential losses are taken into account, not potential profits;
completeness(completeness) - all facts of economic activity for the reporting period that are significant from the point of view of reporting users should be reflected in the reporting;
comparability or comparability(comparability) of information should ensure the comparability of financial statements both with previous periods and in relation to other companies. This means that it is necessary to disclose all changes in accounting policies in such a way that this requirement is met.

International standards set certain limits on the relevance and reliability of information:

timeliness(timeliness) is associated with the need to properly balance the reliability and relevance of information. On the one hand, in order to meet the requirement of relevance, it is necessary to fully collect information on all available facts of economic activity. On the other hand, obtaining complete and reliable information may lead to a delay in the provision of financial statements and, consequently, affect the relevance of the information. Therefore, it is recommended to find the optimal combination between these two requirements;
cost-benefit ratio(balance between benefit and cost) means that the benefits of information should not exceed the costs of obtaining it, and the process of balancing benefits and costs requires professional evaluation;
correlation between quality characteristics(balance between qualitative characteristics) should be the subject of a professional assessment of the accountant and subject to the task of meeting the needs of users of financial statements.

Note. In accordance with the Order of the Ministry of Finance of Russia dated November 25, 2011 N 160n, International Financial Reporting Standards are fully applicable in Russia and are recommended for the preparation of financial statements by Russian companies, and their application is mandatory for consolidated reporting.

In Russia, one of the most rational ways of applying IFRS has been chosen - their adaptation to national conditions. This implies a gradual improvement of Russian accounting and reporting rules aimed at generating high quality financial information in accordance with the requirements of international standards.

Basic principles of International Accounting Standards

The main principles are a set of eleven fundamental principles (concepts) of accounting operating within the framework of the International Accounting and Reporting Standards. Along with them, each country with a market economy may have its own national principles. For example, the USA GAAP entry means "US National Accounting Principles". Our national (Russian) standards in international application will be referred to as IFRS RUS or GAAP RUS.

1. The principle of monetary measurement(Money-measurement concept). According to this principle, only information that can be presented in monetary terms is recorded in financial accounting. The advantage of such accounting is that money is a common measure by which the heterogeneous information of enterprises can be expressed in the form of numbers that can be added, compared, etc. This is fully consistent with Russian accounting principles and, in particular, with the Federal Law "On Accounting".

2. The principle of a separate (autonomous) enterprise(Entity concept). In accordance with this principle, accounts for business units are maintained separately from the accounts of persons related to them. For example, for a small workshop, there is no legal difference between the financial affairs of the enterprise itself and its owners, but accounting is kept for the enterprise as a separate economic unit, and only its operations are reflected in these accounts (personal property and the owner’s operations with it are not taken into account), although in practice, such a distinction is not simple and therefore rather subjective. At the same time, a large corporation is a legal entity separate from its owners, so the corporate accounts correspond exactly to the volume of activity.

3. Going concern principle(Going concern concept). Accounting assumes that the economic unit is a going concern, i.e. it will continue to function for an indefinitely long period. Thus, in accounting, it is believed that the enterprise will continue to operate and that the owners do not intend to sell it. This allows you to keep records not at the current market value, but at the book (book) value. Market value appears in accounting only upon liquidation of the company or with a strict requirement for regular revaluation of assets contained in the relevant IFRS standard.

to the auditor. It is necessary to check whether the method of determining the carrying amount is correctly applied (according to the requirements of the Valuation section of the relevant standard).

4. Cost accounting principle(Cost concept). This is essential principle accounting, closely related to the principle of "going concern", and it lies in the fact that an asset is usually entered into accounting registers at the price paid for its acquisition, i.e. at original cost. This cost is the basis for all subsequent accounting for that asset. This amount is usually not affected by subsequent changes in the price of the asset. Thus, the amounts for which the assets in the accounts of the enterprise are shown do not reflect the selling prices of the assets. Therefore, in accounting, book value and market value are distinguished.

Due to the fact that the value of tangible and intangible assets is constantly either decreasing or increasing, they speak of depreciation and the corresponding depreciation of assets and the so-called. goodwill (goodwill is the business reputation of the company, i.e. the value of the brand name, the reputation of the company's products, clientele and intangible assets of the enterprise, in particular, its location).

Thus, the principle of cost accounting is an objective concept, because it does not allow arbitrary estimates of the current value of assets.

In the national accounting of many countries, they operate with the cost of funds, and not with their market value. Therefore, accounting in terms of the balance sheet does not contain information about the real value of the enterprise's funds at a given point in time, i.e. about their market value.

Because of this, the balance sheet does not make it possible to determine the total value of the enterprise - this requires an additional assessment, such as expertise. So, if an enterprise purchased a non-current asset for $10,000 and a year later it was offered to sell it for $20,000, then this means that the market value of the asset was $20,000.

The amount that should reflect the value of the asset in the "Funds" (assets) section of the company's balance sheet at the end of the year will still be shown as $10,000 less possible depreciation. The difference will be reflected in the "Income" accounts, i.e. the indicated market price will not be included in the assets in full, but will reflect only the acquisition cost minus depreciation (if it was accrued).

to the auditor. When checking the property status of the client, it is necessary to assess the correctness of the reflection of the initial cost of the object according to IFRS standards (not all expenses accounted for in RAS can be included in the cost according to IFRS) and the compliance of the depreciation charge with IFRS (IAS) 16 "Fixed assets".

5. Accounting duality principle(Dual aspect concept). The method of arrangement of accounts, in which the duality of each accounting operation was expressed in the fact that the debit amount was equal to the credit or balanced (levelled) it, was described by Luca Pacioli back in the 15th century. This has given rise to the following rule, which has no exceptions and is used in all accounting models worldwide:

For each transaction, the debit amount must equal the credit amount.

All accounting objects are considered from two positions: from the position of economic assets and from the position of the sources of their acquisition. This is reflected in the company's balance sheet. Double entry allows you to create a complete system for monitoring the correctness of accounting in any enterprise. In its methodology, accounting has always relied on the basic accounting equation:

Assets = Liabilities + Equity.

This means that asset accounts should increase on the left (debit) side and decrease on the right (credit) side.

It follows that the rules for the liability and equity accounts should be opposite rules for asset accounts.

In turn, the rules for recording income and expenses are derived from the rules for registering capital.

In RAS, a slightly different form of recording is used:

Assets = Liabilities.

We also note that in foreign accounting, assets in our understanding are called funds, and the liabilities of our Russian balance sheet equation Assets = Liabilities are divided into two groups in IAS: liabilities (borrowed funds) and owners' capital. The amount of the company's funds is always equal to the sum of its liabilities and capital.

The equation "Funds = Liabilities + Capital" is called balance equation so the financial statement is called enterprise balance sheet.

In IFRS, the concept of "net assets" is widely used:

Net Assets = Assets - Liabilities, or Net Assets = Equity.

6. Accounting period principle(Periodicity concept). It assumes that accounting measures the activities of an enterprise for a specific period of time, called the accounting period. When reporting external parties the accounting period is usually one year, internal reporting periods may be different. In most enterprises, the reporting (or financial) year corresponds to the calendar year, but many firms use the natural business year instead of the calendar year. The choice of the accounting period is fixed in the accounting policy and must comply with the internal requirements of the financial management: if the company's activities are dynamic and subject to risks, relevant information is needed for short periods for possible correction in work.

to the auditor. It is necessary to advise the client to prepare internal reports as often as possible to identify possible losses, difficulties and risks, which, in turn, will help the client quickly correct the situation.

7. The principle of conservatism (caution in assessment)(conservatism concept). According to this principle, in order to recognize an increase in an enterprise's retained earnings (income), stronger evidence is needed than to recognize a decrease in retained earnings (expenses).

In other words, revenues are taken into account when the possibility of their receipt becomes a well-defined event, and expenses - when their possibility is a very probable event. Accordingly, income from the sale of goods or services is recognized in the period in which they are provided to customers.

to the auditor. This is a requirement of IAS 18 Revenue and must be strictly adhered to in order to avoid the creation of doubtful and bad debts, which arise in the absence of payment and seriously distort the balance sheet.

8. Implementation principle(Realization concept). It determines the amount of revenue to be recognized from a given sale. It is allowed that the amount of revenue recognized may be more or less than the selling price of the goods or services sold (for example, in the case of a sale at a discount). It is also allowed to reduce the amount of recognized income by the amount of possible non-receipt of funds, i.e. on the estimated amount of bad debts.

According to this principle revenues are recognized by a company only when its products are delivered to the consumer(and not when it was produced) or her services provided to the client.

Income is taken into account in the amount, the receipt of which is a well-defined event. For example, if in 2012 a company delivered products manufactured in 2011 to its client, then the income from sales will be taken into account by it in 2012. If the company provides services, then the income from them is taken into account at the time the services are provided. Goods (such as shoes) are tangible products. Services (such as TV repair) are intangible products. However, both are products.

The general rule is that income from the sale of products is taken into account when these products are delivered to the consumer, i.e. the risks and control over it by the seller are lost.

For example, in January the company signed a contract for construction work. They were produced in February, and the money for the work was received by the company in March. Companies should take into account income from work in February.

Thus, income is recognized when the sale is considered completed. This corresponds to the moment of delivery of the product to the consumer. Therefore, the term "sales" is quite often used together with the term "income", forming a new term - "sales income". You can sometimes hear from employees of commercial enterprises that they consider the moment of placing an order to be realized, although the goods have not yet been delivered to the buyer. From the point of view of accounting, placing an order is not a sale, because income has not yet been taken into account.

In Russian accounting, this is the well-known "payment on shipment." When specifying in the accounting policy of the enterprise the choice of the method of accounting for payment "according to the cash method", the products or goods are considered to be sold upon receipt of a specific payment in any form.

9. The principle of matching income and expenses(Matching concept). The concept of compliance suggests that if the sale of services or goods affects both revenues and expenses, then the impact on them should be recognized. in the same accounting period.

Terms such as "costs", "fees", "expenses" and "costs" are used to define the period in which expenses are recognized. Costs can be both reporting and future periods. In this case, costs can relate to both assets and expenses. For a cost item to be considered an asset, it must provide some benefit in the future. Otherwise, it refers to the expenses of the current period.

The correct classification of costs as assets or as expenses is one of the most difficult problems in modern accounting and also requires audit control.

10. Sequence principle(consistency concept). Its essence lies in the fact that, having chosen one accounting method once, the enterprise must use it for all subsequent events of a similar nature, until there are good reasons for changing this method. For example, bad debts may be recognized either as a reduction in profits or as an expense. If an enterprise frequently changes the accounting methodology for such events in accounting registers, then it may be difficult to compare its financial statements for different periods, i.e. data comparability required by IFRS as a qualitative property of information is violated.

11. The principle of materiality or materiality(Materiality concept). Accounting neglects insignificant circumstances, but at the same time reflects all significant circumstances.

Significant transactions should include those operations that change the financial condition of the enterprise. The division of transactions into essential and non-essential is subjective. There are no formal rules in this regard. The financial statements of the enterprise should objectively reflect all significant facts.

For example, if the company found that most of the inventory has become unusable, then the principle of materiality requires that this fact be recorded in the financial statements, because. it changes the financial condition of the firm.

Thus, the principle of materiality has two aspects:

1) neglect of insignificant and unimportant events;

2) reflection of all important events in terms of money.

In RAS, this is reflected in this form (i.e., there is a complete analogy), at the same time, IFRS allow companies to determine the materiality threshold on their own (in RAS, it is fixed at the legislative level).

In conclusion, it should be noted that, along with the above principles, the accounting and reporting standards used throughout the world themselves play an important role. In Russian accounting, they are partially reflected in the accounting regulations (PBU), because each PBU is nothing more than a standard for accounting for certain types of activities and accounting objects. It reflects all the features and legislative guidelines (provisions) for keeping records of specific objects.

In subsequent publications, we will analyze the most important international financial reporting standards in terms of their relationship and interconnection with Russian RAS, which will allow us to identify similarities and differences in international and domestic standards, as well as to keep records and generate reports in strict accordance with IFRS.

We talked about American generally accepted GAAP accounting principles in. We will talk about international accounting and financial reporting standards in this material.

What is IFRS

International Financial Reporting Standards (IFRS) are standards and interpretations issued by the IASB and include:

IFRS itself (IFRS, IAS);
clarifications from the International Financial Reporting Interpretations Committee (IFRIC, International Financial Reporting Interpretations Committee, IFRC);
clarifications from the Standards Interpretations Committee (SIC, Standing Interpretations Committee, SIC).

IFRS are also often referred to as International Accounting Standards (IAS).

Who applies IFRS

Currently, IFRS in the Russian Federation are required to apply organizations that prepare consolidated financial statements (part 1 of article 3 of the Federal Law of July 27, 2010 No. 208-FZ). Other organizations can keep parallel accounting: according to national and international accounting standards.

At the same time, it is important to take into account that the development and improvement of the theory and practice of accounting in the Russian Federation are carried out in accordance with international accounting standards.

Thus, on 06.03.1998 the Decree of the Government of the Russian Federation No. 283 approved the Accounting Reform Program in accordance with IFRS.

On December 28, 2015, the Ministry of Finance of the Russian Federation issued Order No. 217n on the entry into force of IFRS in the territory of the Russian Federation. This document approved 66 international standards, including IFRS itself and explanations to them.

At the same time, given that from 01.04.2001 IFRS are issued by the IASB, and before that date were issued by the IASB, there are currently IFRS that have the same number. They differ precisely in the body that issued them. So, for example, IAS 1, issued by the IASB, is called IAS 1 "Presentation of financial statements", and prepared by the IASB - IFRS 1 "First-time application of International Financial Reporting Standards".

Similarly, IAS 2 may comply with both IAS 2 Inventories and IFRS 2 Share-based Payments.