International Financial Reporting Standards. Cheat sheet: briefly, the most important

Free technical library

Lecture notes, cheat sheets
Free library / Directory / Lecture notes, cheat sheets

International Financial Reporting Standards. Cheat sheet: briefly, the most important

Lecture notes, cheat sheets

Directory / Lecture notes, cheat sheets

Comments on the article

Table of contents

The concept of international financial reporting standards
Reasons for implementing IFRS in Russia
Goals of Russia's transition to IFRS
Basic concepts of financial accounting under IFRS
Purpose and components of financial statements
Financial Statement Disclosure Requirements
Information to be disclosed in the income statement
Information to be disclosed in the statement of changes in equity
General IAS 2 Inventories
Reserve valuation procedure
Methods and methods for determining reserves
Operating, investment and financial activities
Errors and changes in accounting policies
Selecting and applying accounting policies
Change in accounting policy
Recognition and measurement of events after the balance sheet date
Disclosure after the reporting date
Construction contract revenue and costs
Recognition of income and expenses under a construction contract
The concept and recognition of current tax liabilities
Segment definition order
Valuation of fixed assets
Depreciation methods
Disclosure of property, plant and equipment in financial statements
General provisions and scope
Lease classification
Leases in the financial statements of tenants
Leases in the lessor's financial statements
Recognition and measurement of short-term employee benefits
Severance pay
Post-employment benefits
Recognition and measurement of compensation payments
Government Aid Information
The procedure for reflecting information on state subsidies
Accounting for borrowing costs
Types of pension plans
And accounting for investments in subsidiaries"
Procedure for presenting consolidated financial statements
Consolidation procedure
Application of consolidated financial statements
Financial statements prepared on the basis of actual cost
Financial statements prepared on the basis of current costs
And similar financial institutions"
The concept of jointly controlled assets
The procedure for reflecting participation in joint activities in the financial statements
Disclosure of Information on Financial Instruments
Presentation of information on financial instruments
Entrepreneurial risk
The concept of basic and diluted earnings per share
Forms, composition and content of interim financial statements
Recognition and measurement of interim financial statements
Disclosure of information about the impairment of assets
The concept of "estimated liabilities"
The concept of "conditional liabilities"
The concept of "conditional assets"
Estimating Liabilities
Valuation and recognition of intangible assets
Intangible assets with a definite and indefinite life
Disclosure of information on intangible assets in financial statements
Recognition and derecognition in financial instruments
Valuation of financial instruments
Investment property disclosure

THE CONCEPT OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

The concept of "International Financial Reporting Standards" (IFRS) includes the following documents:

1) Preface to the provisions of IFRS;

2) Principles of preparation and presentation of financial statements;

3) Standards;

4) Explanations.

In the Preface to International Financial Reporting Standards sets out the objectives and procedures of the IASB Committee and explains the application of international standards.

Principles for the preparation and presentation of financial statements determine the basis for the preparation and presentation of financial statements for external users. The principles are not a standard and do not replace them. They address the following questions:

1) the purpose of the financial statements;

2) qualitative characteristics that determine the usefulness of reporting information;

3) definitions;

4) the procedure for recognition and measurement of elements of financial statements;

5) the concept of capital and the maintenance of capital.

This document is intended to help:

1) the IASB in the development of new and revision of existing standards;

2) national standardization bodies in the work on national standards;

3) preparers of financial statements in applying IFRS and determining the procedure for reporting on matters for which standards have not yet been adopted;

4) auditors in forming an opinion on the compliance or non-compliance of financial statements with IFRS.

International Financial Reporting Standards represent a system of accepted provisions on the procedure for the preparation and presentation of financial statements. The standards are intended for the preparation of financial statements whose users rely on them as the primary source of financial information about a company.

Interpretations of IFRS are prepared by the Standing Interpretations Committee and adopted by the Board of the IASB. They interpret the provisions of the standards containing ambiguous or unclear solutions. They ensure the uniform application of standards and enhance the comparability of financial statements prepared on the basis of International Financial Reporting Standards. The clarifications are of great interest to users of the standards.

IFRS are developed by the International Accounting Standards Committee (IFRS) , which was established in 1973. The Committee was originally founded as a result of an agreement between professional accounting organizations from ten countries. Since 1983, all professional accounting organizations that are members of the International Federation of Accountants have become members of the IASB.

REASONS FOR INTRODUCING IFRS IN RUSSIA

IFRS have made a great contribution to the improvement and harmonization of financial reporting on a global scale. These standards form the basis of accounting and reporting systems in many countries. They are an international standard for countries that develop their own accounting and reporting requirements. International standards are used by stock exchanges and various regulators to allow foreign and domestic companies to present financial statements in accordance with IFRS.

Implementation of International Financial Reporting Standards in Russia began in 1992. The State Program for Russia's transition to a system of accounting and statistics was adopted in accordance with the requirements of economic development. The process of reforming the domestic accounting system lags behind the general process of economic reforms in Russia. In order to change this state of affairs, the Accounting Reform Program in accordance with IFRS was developed. "Accounting reform program in accordance with international financial reporting standards" was approved by the Decree of the Government of the Russian Federation dated March 06.03.1998, 283 No. XNUMX.

Reasons for the increased interest in IFRS in Russia:

1) lack of investment inflow to Russia due to the lack of reliable information about the true financial position and financial results of the organization trying to obtain investments. For Russian companies, access to the largest stock exchanges is possible if they recognize international accounting standards. Formation of reporting in accordance with IFRS is one of the conditions that open up the possibility for Russian enterprises to join the international capital markets;

2) differences in financial statements formed in accordance with international standards, from financial statements prepared in accordance with Russian accounting standards. International standards are focused on specific users and proceed from the criterion of usefulness of financial information for making economic decisions by users;

3) expanding the scope of powers and responsibilities of Russian accountants , increasing their knowledge and skills, which leads to an increase in the reliability and significance of financial accounting and the sustainability of the country's economy as a whole;

4) the use of IFRS allows reduce time and resources for developing new accounting rules. Approximation of the Russian accounting and reporting system to IFRS will solve the problem of creating an effective accounting system.

OBJECTIVES OF THE RF TRANSITION TO IFRS

The goal of reforming the system accounting - bringing the Russian accounting system in line with the requirements of a market economy and IFRS.

Reform objectives:

1) formation of a system of accounting and reporting standards that provide useful information to users;

2) ensuring the linkage of the accounting reform in Russia with the main trends in the harmonization of standards at the international level;

3) assisting organizations in understanding and implementing the reformed accounting model.

Directions of reform:

1) improvement of normative legal regulation;

2) formation of a regulatory framework;

3) methodological support (instructions, guidelines, comments);

4) staffing (formation of the accounting profession, training and advanced training of accounting specialists);

5) international cooperation (entry and active work in international organizations; interaction with national organizations responsible for developing accounting standards and regulating relevant activities).

Disadvantage of applying IFRS is that the reporting entity is free to choose how transactions are reflected in the accounting and financial statements. This variance contributes to the distortion of reporting information.

Advantages international standards before Russian ones:

1) clear economic logic;

2) generalization of world practice in the field of accounting;

3) ease of perception for users.

Purpose of accounting regulation - regulation of access for all interested users to information that represents an objective picture of the financial position and performance of enterprises. To do this, the following questions need to be addressed:

1) reorientation of regulatory regulation from the accounting process to accounting;

2) regulation of financial accounting;

3) balanced use of international standards in national regulation.

An important component of regulatory support is maintaining the stability of the development of the accounting system. The main task is to create acceptable conditions for the consistent, useful, rational and successful performance of the accounting system of its inherent functions in a particular economic environment.

In Russia, the method of applying IFRS has been chosen, which involves the gradual improvement of Russian accounting and reporting rules, aimed at generating high quality information in accordance with the requirements of international standards.

BASIC IFRS FINANCIAL ACCOUNTING CONCEPTS

IFRS distinguishes the following financial accounting concepts :

1) money dimension concept . All business transactions are shown in monetary terms;

2) the concept of enterprise independence.

Each enterprise is considered as an independent unit. There are several organizational and legal forms of economic activity:

private business - a business owned by one person (which enables the owner to fully control the ongoing business activities);

partnership - a company created by two or more owners who have combined their resources and talents to achieve common goals;

corporation - a person legally independent of the owners, whose contributions are presented in the form of share capital;

3) the concept of compliance of income and expenses with the reporting period (accrual).

This concept ensures that expenditures are in line with the income received as a result of these expenditures. Income refers to the accounting period in which goods are sold, services are provided; expenses - when they were incurred to generate these incomes. Financial reporting provides information not only about past transactions, but also about obligations to pay money in the future and about resources that will be received in future periods;

4) the concept of continuity. The concept of "going concern" implies that the entity will continue in operation for a period sufficient to use its assets for their intended purpose and pay off debts in the normal course of business. This concept is known as the going concern concept;

5) the concept of cost (cost).

All assets must be accounted for at the acquisition price (cost of production).

This price serves as a basis for estimating their future use, and liabilities and equity components are recorded at the amount fixed at the time of their inception.

Methods for measuring the elements of financial statements IFRS

1. Recovery cost - the amount of cash or cash equivalents that must be paid for the acquisition of a similar asset in modern conditions.

2. Possible selling price - the amount of cash that would currently be received from the sale of an asset under normal circumstances.

3. Discounted value - the future net cash inflow that the asset would generate under normal circumstances, or the future net cash outflow that would be required to settle the liability in the normal course of business.

IFRS No. 1 "PRESENTATION OF FINANCIAL STATEMENTS":

PURPOSE AND COMPONENTS OF FINANCIAL STATEMENTS

IFRS No. 1 Presentation of Financial Statements applies to all general purpose financial statements. Purpose of general purpose financial reporting - provision of information on the financial position and financial performance of the organization to those persons who are interested in making economic decisions. To achieve this objective, financial reporting provides information on the following: organization performance :

1) assets;

2) obligations;

3) equity;

4) income and expenses, including profits and losses;

5) other changes in equity;

6) cash flow.

This information enables users to predict the movement and distribution of the organization's funds, allows you to evaluate the activities of the company's management in managing the resources entrusted to it. Financial statements must comply with all the rules established by the standards and interpretations to them (both in terms of accounting and in terms of information disclosure), and cannot be recognized as compliant with IFRS if there are any deviations from the standards or interpretations.

The components of financial statements include:

1) balance;

2) profit and loss statement;

3) statement of changes in capital;

4) cash flow statement.

Financial statements must be clearly identified and distinguished from other information within a single published document. Each component of the financial statements must be clearly identified. Reporting should be provided in such a way that users can distinguish information prepared in accordance with International Standards from other information that is not the subject of IFRS.

Information that should be clearly identified in the financial statements:

1) the name of the reporting entity or other identifying features, as well as any changes in this information since the previous reporting date;

2) whether the financial statements cover an individual entity or a group of entities;

3) reporting date or period covered by the financial statements;

4) presentation currency (in accordance with IFRS No. 21 "The Effects of Changes in Foreign Exchange Rates").

Financial statements must be submitted at least once a year. If the entity's reporting date has changed or the annual financial statements are presented for a period shorter or longer than one year, the reason for using the longer or shorter period must be provided.

REQUIREMENTS FOR DISCLOSURE OF FINANCIAL STATEMENTS

Financial statements are based on subjectively chosen rules and estimates. For the correct interpretation of information by users, reporting must meet certain requirements.

Requirements for disclosure of financial statements:

1) clarity. Financial statements should be understandable to a wide range of users.

Information about complex issues should be excluded due to difficulty in understanding by certain users;

2) relevance. Financial statements should contain all the necessary information for those who make decisions on the basis of the reporting data. Information is considered relevant if it enables users to evaluate past, present and future events;

3) materiality. This characteristic indicates the importance of an event or operation. An event is considered material if its misstatement affects the decision of users of financial statements. Materiality is defined in terms of money relative to the sum of all assets or profits for a certain period of time;

4) neutrality . Financial information must be provided regardless of the interests of any individual or group. The data in the financial statements should fully reflect the economic activities of the organization;

5) reliability . The information presented in the financial statements must faithfully reflect the events that occurred during the reporting period. When preparing financial statements, it can be difficult to determine the financial impact of a transaction on the financial statements;

6) full information . All financial statements, additions and notes to them must contain all the necessary information for users of these statements;

7) discretion . This characteristic indicates caution in the formation of judgments about the events of the organization in conditions of uncertainty. If it is difficult to determine financial indicators, it is necessary to choose the lowest estimate for assets and income, and the highest estimate for liabilities and expenses;

8) full information . Each standard has a disclosure section that contains a complete list of information that must be reflected in the financial statements;

9) dominance of essence over form .When recording transactions, it is necessary to take into account not only their legal form, but also their economic essence;

10) comparability . Users of financial statements should be able to compare statements for different periods of time from the same enterprise and from different organizations for the same period of time. This is necessary to identify the performance of enterprises.

INFORMATION FOR DISCLOSURE IN THE BALANCE SHEET

Balance - this is a source of information about the financial position of the organization for the reporting period, it is a way of economic grouping and generalization of the organization's property by composition and location, as well as by the sources of its formation, expressed in monetary terms and compiled on a certain date. The balance sheet is a two-sided table. The left part, which reflects the subject composition, placement and use of the organization's property, is called balance asset . The right side is called balance sheet liability and shows the amount of funds invested in the economic activity of the organization, the form of its participation in the creation of property.

When presenting financial statements in accordance with IFRS No. 1 "Presentation of Financial Statements", the balance sheet must reflect the following: amount :

1) fixed assets;

2) intangible assets;

3) investment property;

4) investments accounted for using the participation method;

5) financial assets (except for the amounts specified in paragraphs 5, 6, 9);

6) stocks;

7) biological assets;

8) cash;

9) accounts receivable;

10) accounts payable;

11) estimated liabilities;

12) financial liabilities (except for the amounts specified in paragraphs 10, 11);

13) deferred tax liabilities and tax assets in accordance with IFRS No. 12 "Income Taxes";

14) liabilities and assets for current tax (in accordance with IFRS No. 12 "Income Taxes");

15) minority interest indicated in equity;

16) issued capital and reserves.

According to IFRS No. 1 "Presentation of Financial Statements", the balance sheet must contain additional line items, headings and subtotals. The decision to provide additional items in the financial statements depends on:

1) nature and liquidity of assets;

2) assignment of assets.

An entity is required to disclose subclasses of line items in the balance sheet. The degree of subclassing depends on the size, nature and purpose of the amounts. Each article has its own disclosure features:

1) fixed assets are divided into the following classes: land plots; land plots and buildings; cars and equipment; water vessels; aircraft; vehicles; furniture and built-in elements of engineering equipment;

2) classes of receivables: debts of buyers and customers; related party debt; prepayments;

3) stocks are divided into the following classes: goods; production supplies; materials; unfinished production; finished products

INFORMATION FOR DISCLOSURE IN THE PROFIT AND LOSS STATEMENT

An entity is required to present an income statement in accordance with IFRS No. 1 Presentation of Financial Statements. All items of income and expense recognized in the reporting period must be included in profit or loss. Under certain circumstances, certain items may be excluded from net profit or loss for the current period. IFRS No. 8 "Net profit or loss for the period, fundamental errors and changes in accounting policies" such circumstances include the correction of errors and the consequences of a change in accounting policy. Profit and loss statement in accordance with International Financial Reporting Standards must contain the following: Articles :

1) revenue;

2) financing costs;

3) profit or loss before taxation;

4) tax expenses;

5) profit or loss.

If items of income and expenses are material, their amounts should be disclosed separately. Circumstances in which items of income and expenses are disclosed separately:

1) writing down the cost of inventories to the amount of possible net realizable value or property, plant and equipment to the recoverable amount;

2) restructuring of the organization's activities;

3) disposal of fixed assets;

4) settlement of litigation;

5) disposal of investments.

Entities are required to present an analysis of expenses according to a classification that is based on the nature of the expenses or their purpose. All expenses must be broken down into classes to highlight the components of financial performance.

Types of analysis:

1) by the nature of the costs. In the income statement, all expenses must be combined according to their nature (depreciation, transportation costs, purchase of materials, etc.). This method does not require allocation of costs according to the functional classification.

Classification by nature of costs: revenue; other income; changes in stocks of finished goods and work in progress; used raw materials and consumables; employee benefit costs; depreciation expenses; other expenses; profit;

2) by purpose of costs (at cost of sales). Using this method, the costs are divided according to their purpose as part of the cost of sales (sales costs, administrative activities).

Classification by purpose of costs: revenue; cost of sales; gross profit; other income; marketing costs; Administrative expenses; other expenses; profit.

The choice of cost analysis method depends on the sectoral affiliation of the organization.

INFORMATION FOR DISCLOSURE IN THE STATEMENT OF CHANGES IN EQUITY

Much attention in international standards is given to the statement of changes in equity, as it is the most important for users of financial statements. International Financial Reporting Standards do not require a statement of comprehensive income, so the statement of changes in equity is the only source of information on changes in equity.

In accordance with IFRS No. 1 "Presentation of Financial Statements" the entity is required to present a statement of changes in equity, which must contain the following information:

1) net profit or loss for the period;

2) income and expenses for the period, which are recognized directly in equity;

3) income and expenses for the period, showing separately the totals attributable to the equity holders of the parent company;

4) for each component of equity, the impact of changes in accounting policies and corrections of errors.

The statement of changes in equity or the notes thereto must disclose information on investments, on the balance of retained earnings at the beginning and end of the reporting period, on the change in each component of equity at the beginning and end of the period (ordinary and preferred shares, additional capital) for the period .

The translation reserve reflects the accumulated amount of income and expenses resulting from the occurrence of foreign exchange differences, which, in accordance with international standards, must be attributed to equity.

As part of income and expenses attributable directly to equity, allocate the results of the revaluation of non-current assets. These results are accumulated as a revaluation reserve. Changes in an entity's equity between two reporting dates show an increase or decrease in net assets during the reporting period.

IFRS 1 Presentation of Financial Statements requires an entity to present the following in the statement of changes in equity:

1) the amount of transactions with owners of equity capital, reflecting separately payments to owners of equity capital;

2) the balance of retained earnings (cumulative profit or loss) at the beginning of the period or on the reporting date;

3) a reconciliation between the carrying amount of each class of paid-in equity and each provision at the beginning and end of the period. IFRS 1 Presentation of Financial Statements requires all items of income and expense recognized in a period to be included in net profit or loss. The exception is when other standards require otherwise.

GENERAL IFRS 2 RESERVES

Purpose of IFRS 2 Inventories - Establishment of the inventory accounting procedure. The standard can be applied to all inventories, except work in progress arising from construction contracts, biological assets associated with agricultural activities.

IFRS No. 2 discloses :

1) the procedure for determining costs and their recognition as expenses;

2) methods for calculating the cost of inventory.

Stocks - assets that are held for sale during the normal business cycle or for production for the purpose of making and selling products.

The inventories of a manufacturing enterprise are divided into 3 groups :

1) finished products. Completely ready for sale;

2) work in progress - stocks that are at various stages of production, but have not yet completed a full production cycle;

3) raw materials and supplies needed for production.

The cost of inventories should include all acquisition, processing and other costs incurred to bring them into appropriate condition.

This standard is used for reporting for periods beginning on 01.01.2005/XNUMX/XNUMX. Inventories are reported in the reporting according to the rule of the lower of two estimates: cost and net realizable value (i.e., the estimated cost, including the selling price, minus the estimated costs to bring to a marketable condition and sale).

Fair value reflects the amount for which similar inventories could be exchanged in a transaction between buyers and sellers in the market, who should have good knowledge of the transaction.

According to IFRS No. 2, the financial statements disclose the following: information:

1) accounting policy for estimating reserves;

2) current value by type with the allocation of the current value of inventories, reflected at net realizable value;

3) the current value of stocks that are collateral for obligations;

4) in the balance sheet, inventories should be reflected in current assets immediately after accounts receivable;

5) in the profit and loss statement - information on the method of valuation of reserves, accounting principles.

Possible mistakes that arise when determining the amount of reserves can significantly affect the financial performance of the company:

1) if the level of stocks at the end of the year is underestimated, then this will lead to an underestimation of net profit, and vice versa;

2) if the level of inventories at the beginning of the year is underestimated, then this will lead to an overestimation of net profit for the year, and vice versa.

In Russian practice, accounting for inventories is carried out in accordance with PBU 5/01 "Accounting for inventories".

RESERVES ESTIMATION PROCEDURE

IAS 2 defines inventories as assets held for sale in the normal course of business, in the production process for sale, in the form of raw materials for use in the production process or the provision of services.

Reserve valuation - This is an assessment of the monetary value of stocks of raw materials, work in progress and final products of the enterprise.

Reserves must be valued by the smallest of the two values:

1) cost;

2) possible net realizable value.

Cost of inventory includes :

1) acquisition costs. Include: purchase price; import duties; other taxes, with the exception of those reimbursed by the tax authorities; transportation costs; processing costs; other costs associated with the acquisition of inventories;

2) processing costs;

3) other costs incurred to bring stocks to their current state and location.

Approaches to the formation of stocks:

1) conservative approach - is the creation of high stocks;

2) moderate approach - creation of the normal sizes of stocks in case of the most typical failures;

3) aggressive approach - minimization of stocks.

The cost of inventories should be recognized as an expense in the reporting period in which the related revenue from the sale of inventories is recognised. The amount of any write-down of inventories to net realizable value, and all losses of inventories, are expensed in the period in which the loss occurs or the write-down occurs.

Methods determining the cost of inventory:

1) the method of accounting for actual costs (method of specific identification). Condition : the method is used to estimate the cost of inventory items that are not interchangeable, as well as goods and services intended for special projects;

2) the method of accounting for sales prices. Condition: the method is used in the valuation of inventories consisting of a large number of items for which other methods are ineffective. The cost of inventory is calculated by reducing the total cost of inventory sold by a certain percentage of gross margin. The percentage used takes into account inventory that has been marked down below its original selling price;

3) normative method. The organization independently chooses the method of estimating reserves, which must be used from year to year. Only in the presence of serious circumstances can an enterprise change the method of estimating reserves. This fact must be reflected in the annual report, indicating the causes and consequences that occurred as a result of this change.

METHODS AND METHODS FOR DETERMINING RESERVES

IFRS 2 Inventories defines the following inventory accounting methods :

1) continuous identification method . Using this method, it is necessary to track the actual movement of all goods, while the cost of a single product is charged directly to the cost of goods sold. The disadvantage of the method is uneconomical. The method is used where the cost of a unit of goods is significant, and the quantity of goods is small. The method is used when an enterprise is engaged in the sale of a limited range of expensive goods, while each product can be identified from the moment of purchase to the moment of sale;

2) average cost method (weighted average cost method and moving average cost method). The use of the method is possible with the homogeneous nature of the goods. Accounting is carried out according to one of two methods:

a) a system of continuous accounting of reserves;

b) a system of periodic accounting of stocks.

In a permanent accounting system, all inventory movements must be reflected in one account, and in a periodic accounting system, the inventory account does not change, and all movements are recorded in other accounts. In both inventory systems, revenue from the sale of goods is recognized at the date of sale. But in the system of periodic accounting, at the date of sale, the accounting does not reflect the cost of goods sold;

3) LIFO method . The method is based on the assumption that the most recently purchased items go on sale first. The method is based on the assumption that all goods purchased during the period can be put up for sale, regardless of the date of their purchase.

The disadvantage of the method is that during periods of rising prices, it gives the lowest net profit of all methods. The LIFO method in IFRS was canceled from 01.01.2 (it continues to be valid in Russian accounting) due to the bias in the assessment of reserves when using this method;

4) FIFO method - write-off at cost price of the first stocks by the time of acquisition. The method assumes that the stocks bought or produced first will be the first to be sold, which means that the stocks that remained at the end of the period were bought or produced earlier. According to the method, stocks at the end of the period are valued at the cost of the latest purchases. During a period of rising prices, the FIFO method gives the highest net profit of all methods.

Cost determination stages goods sold:

1) to determine the cost of goods for sale, the cost of purchased goods is added to the cost of goods at the beginning of the period;

2) the cost of goods at the end of the period is deducted from the cost of goods for sale.

IFRS No. 7 STATEMENTS OF CASH FLOW: DISCLOSURE REQUIREMENTS

According to IFRS No. 7 Statements of Cash Flows enterprises are required to present a cash flow statement for each period. The cash flow statement contains information on cash flows from operating, investing and financing activities, and the net cash result from these activities.

Cash and cash equivalents are used as indicators of the report.

Cash - these are funds in cash and on the current account of the enterprise.

Cash equivalents - short-term, highly liquid investments, easily convertible into a predetermined amount of money. Cash equivalents are held to meet short-term cash liabilities and not for investment or other purposes.

Users of a company's financial statements are interested in how the company creates and uses cash and cash equivalents. The cash flow statement provides information that allows users to assess the change in an organization's net assets, financial structure, liquidity and solvency of an enterprise. There is no rigidly regulated form of the report. When compiling the report, cash and cash equivalents are summarized and taken into account as a total amount. The amounts of cash and cash equivalents reflected at the end of the reporting period must correspond to the data reflected in the balance sheet.

Reporting steps:

1) determination of the net increase or decrease in funds;

2) determination of net cash from operating activities;

3) determination of net cash from investment and financial activities.

In determining net cash from operating activities, an entity shall recalculate operating activities calculated using the indirect (direct) accrual method. As a result of applying both methods, the same indicator is calculated - net cash from operating activities. The direct and indirect methods use a different procedure for disclosing indicators in the calculation. According to International Standards, preference is given to using the direct method.

Classifying cash flows helps investors evaluate:

1) the potential of the organization to generate cash flows;

2) the organization's potential to pay dividends and meet its obligations;

3) the reasons for the difference between net profit and net cash flows from operating activities;

4) investment and financial transactions.

OPERATING, INVESTING AND FINANCING ACTIVITIES

Operating activities - this is the main income-generating activity of the organization, and other activities, except for investment and financial activities.

Main cash flows:

1) cash receipts from the sale of goods and services;

2) cash payments to employees;

3) cash payments to suppliers for goods and services;

4) cash receipts and payments of the insurance company as insurance premiums and claims;

5) cash receipts from rent, commissions and other revenues;

6) cash receipts and payments under contracts concluded for commercial and trading purposes;

7) cash payments or income tax compensations, if they are not linked to financial and investment activities.

Investment activity - acquisition and disposal of long-term assets and other investments that are not cash equivalents.

Main cash flows:

1) for the acquisition of fixed assets and intangible assets;

2) from the sale of fixed assets and intangible assets;

3) cash receipts from reimbursement of advances and loans;

4) advance payments and loans;

5) cash payments for the acquisition of equity, debt instruments and shares in joint activities;

6) cash receipts for the acquisition of equity, debt instruments and shares in joint activities;

7) cash receipts from fixed-term contracts, except when contracts are concluded for commercial purposes;

8) cash payments from fixed-term contracts, except when the contracts are also concluded for commercial purposes.

Financial activities - activities that lead to changes in the amount and structure of equity and borrowings of the organization.

Main cash flows:

1) cash receipts from the issue of shares;

2) cash receipts from the issue of unsecured shares, loans, bills of exchange, secured shares and long-term loans;

3) cash payments to owners for the acquisition or redemption of company shares;

4) payments by the lessee to reduce debt under financial lease;

5) cash repayments of loan amounts.

In accordance with IFRS No. 7 Statement of Cash Flows, an entity is required to present cash flows from operating activities using the direct or indirect method. Cash receipts or payments from investing and financing activities are presented separately.

Cash flows from operating, investing and financing activities may be presented on a net basis.

SCOPE OF IFRS 8, NET PROFIT OR LOSS FOR THE PERIOD, FUNDAMENTAL

ERRORS AND CHANGES IN ACCOUNTING POLICIES"

IFRS No. 8 determines the procedure for choosing and applying an accounting policy, when making changes to an accounting policy, when correcting errors for previous periods, when making changes in accounting estimates. Compliance with the requirements of the standard ensures the comparability of the financial statements of this organization with the statements of other organizations for certain periods of time.

Accounting policy — the principles, bases, rules and conventions that an entity uses to prepare and present financial statements.

Changes in accounting estimate - adjustment of the carrying amount of an asset or liability due to an assessment of the current state of assets and liabilities and the expected future benefits and obligations associated with them. Changes in estimated estimates are the result of new information, not the correction of errors.

Prior Period Errors - incorrect data in the financial statements of the organization for one or more previous periods, which arose as a result of incorrect use of information. These may be errors in calculations, errors in the application of accounting policies, fraud, etc. Distortions of information are considered material if they can affect the economic decisions made on the basis of these statements. All items of income and expenses are included in the calculation of net profit (loss) for the period. These items also include the impact of changes in accounting estimates.

Circumstances, at which certain items are excluded from the calculation of net profit (loss) for the period:

1) correction of significant errors;

2) the impact of changes in accounting policies.

Components of net profit (loss) for the period :

1) profit (loss) from operating activities. Ordinary activities are those activities carried on by an enterprise as part of its business, and those related activities that are subsequently carried out are inherent in, or arise from, ordinary activities;

2) emergency articles. These are income or expenses arising from events or transactions that can be clearly separated from the ordinary activities of the entity and that can be expected not to occur frequently or regularly.

Termination of the economic process sale or termination of a business process that represents a separate and significant part of the entire economic activity of the enterprise and in relation to which it is possible to clearly distinguish the amount of assets and net profit (loss)

SELECTION AND APPLICATION OF ACCOUNTING POLICIES

According to IFRS No. 8 "Net profit or loss for the period, fundamental errors and changes in accounting policies", accounting policies are understood as specific principles, bases, conventions used for the preparation and presentation of financial statements. The accounting policy should allow the preparation of such reports that contain complete, reliable and reliable information about the activities of the enterprise. Accounting policy in relation to objects, operations is compiled on the basis of standards, agreements and interpretations. If there are no standard requirements for any operation, then the organization can independently develop and apply an accounting policy, on the basis of which it is possible to obtain information, meeting the requirements:

1) timeliness for making management decisions;

2) reliability;

3) reliability;

4) neutrality;

5) completeness, etc.

When developing an accounting policy on its own, an organization should study standards, regulations, industry specifics that are close to this topic. The organization must apply its accounting policies consistently for similar events, transactions throughout the reporting period. The main principle of formation of accounting policy in accordance with IFRS No. 8: the costs of preparing financial statements should be consistent with the benefits that they provide. Russian practice shows that the reporting of enterprises according to international standards is made by transforming the reporting prepared according to Russian standards. Therefore, when developing an accounting policy, it is important to take into account the requirements of both Russian and international standards.

Significant and immaterial errors may occur in the preparation of financial statements. Financial statements do not comply with international standards if they contain material errors or immaterial errors that are made in order to achieve the desired financial position and results of operations. Current period errors discovered in the reporting period are corrected before the financial statements are authorized for issue. Error detection methods:

1) recalculation of comparative amounts for the period in which the error was made;

2) restatement of the opening balances of assets, liabilities and equity for the earliest prior period if the error occurs in the earliest prior period presented.

Under IFRS No. 8, the correction of a prior period error must be excluded from profit or loss in the period in which it is discovered.

CHANGES IN ACCOUNTING POLICIES

According to IFRS No. 8, an entity, in certain cases, can change its accounting policy:

1) if this is due to changes in regulatory and legislative acts;

2) if the changes make it possible to obtain more reliable and complete information about the activities of the enterprise.

An entity shall account for a change in accounting policy associated with changes to a Standard. If an entity changes an accounting policy on first application of a Standard that does not have specific transitional provisions, or if an entity changes an accounting policy voluntarily, it must apply the change retrospectively.

In this case, an adjustment is required to the balance of each of the affected components for the earliest period presented and other related amounts disclosed for each prior period if the new accounting policy had always been applied. When a change in accounting policy is made in connection with the application of a Standard, an entity discloses information:

1) the name of the Standard;

2) the fact that changes in accounting policies have been made in accordance with the transitional provisions of the Standard;

3) description of transitional provisions;

4) significant changes in accounting policies;

5) the amount of adjustments for the current and previous periods;

6) if retrospective application of the changes is not possible, a description of the circumstances that led to the existence of this condition.

When a change in accounting policy has, or is likely to have, an effect on the current or prior period, an entity recognises: information:

1) the nature of the changes in accounting policies;

2) the reasons that led to changes in accounting policies;

3) the amount of adjustments for each item in the financial statements, for basic and diluted earnings per share.

The reporting also needs to disclose the fact that the organization does not accept the terms of new standards that have already been published, but have not entered into force.

Items in financial statements may not be accurately calculated, but may only be estimated. When compiling reports, it is possible to use reasonable estimates. An estimate may be revised if the circumstances on which it is based change. The revision of estimates cannot be considered a correction of an error and does not apply to previous periods. Changes in estimates are included in profit or loss in the period in which the change occurs (if it affects that period), or in the period in which the change occurs, and in future periods (if the effect is spread over more than one period).

OBJECTIVES IFRS 10 CONTINGENCIES AND SUBSEQUENT EVENTS

The purpose of IFRS No. 10 "Contingencies and events occurring after the balance sheet date" is to establish:

1) when an entity is required to adjust financial statements to reflect events after the balance sheet date;

2) requirements for information that an entity must disclose in relation to the date the financial statements were authorized for issue, as well as events that occurred after the reporting date.

Events after the reporting date are events that occur between the reporting date and the date the financial statements are authorized. In this regard, it is necessary either to adjust the financial statements, or to disclose additional information in the explanatory notes to the statements.

Events after the balance sheet date include all events before the date the financial statements were authorized for issue, even though those events occurred after the date the financial information was published.

Types of events after the reporting date:

1) corrective events - events that confirm the existence of a condition at the reporting date.

In accordance with IFRS No. 10, such events include: a court decision issued after the reporting date confirming that the company has a liability at the reporting date; receipt after the reporting date of information that indicates a decrease in the value of an asset determined at the reporting date; determination after the reporting date of the value of assets that were acquired before the reporting date; detection of errors after the balance sheet date that indicate that the financial statements prepared at the balance sheet date contain misstatements;

2) non-adjusting events - events that indicate the occurrence of a condition after the reporting date.

According to this standard, such events include the following: if there has been a decrease in the market value of investments in the period between the date of approval of the financial statements and the date of their issue; there was a merger after the reporting date; transactions with ordinary shares were made; changes in tax rates in the legislation on taxes and fees; the foreign exchange rate has changed a lot; major litigation has commenced that relates to events after the reporting date. The process of approving financial statements depends on the governance structure, regulatory requirements, procedures for preparing and finalizing financial statements. An organization is required to present financial statements to shareholders upon issue. In such cases, the financial statements are considered approved on the day they are issued, and not on the day they are approved by the shareholders.

RECOGNITION AND EVALUATION OF EVENTS AFTER THE REPORTING DATE

When evaluating events after the reporting date attention should be paid to the significance of these events. Following the principle of materiality involves the reflection in accounting and reporting of information, without knowledge of which it is impossible for users to reliably assess the financial condition, cash flow or performance of the organization. The organization decides whether this indicator can be considered material.

Events that indicate the occurrence of economic conditions after the reporting date include the following events:

1) making a decision on the reorganization of the organization;

2) a decision to issue shares and other securities;

3) actions of public authorities;

4) decrease in the value of fixed assets after the reporting date;

5) change in foreign exchange rates after the reporting date, regardless of forecasts;

6) natural disasters and emergency situations;

7) acquisition of a property complex;

8) termination of a part of the main activity of the company, if this was not foreseen as of the reporting date;

9) reconstruction.

In accordance with IFRS No. 10 “Contingencies and events after the balance sheet date”, all events after the balance sheet date during the reporting period must be recognized in the financial statements, regardless of whether their consequences are favorable for the entity or not. The consequences of events after the balance sheet date must be measured in monetary terms. If such an assessment cannot be made, this fact must be reflected in the explanatory note.

An entity is required to adjust the amounts recognized in its financial statements to reflect the effects of adjusting events that occur after the balance sheet date.

Reasons for selecting events after the reporting date:

1) observance of the interests of users in accordance with the law;

2) reflection in the reporting of events after the reporting date, but which actually occurred in the reporting year;

3) reflection in the reporting of events after the reporting date that occurred after the reporting date, but before the submission of reports for the reporting period;

4) reflection in the reporting of events after the reporting date for the reporting year, regardless of the result for the organization;

5) assessment of materiality.

Information that is reflected in the notes to the balance sheet and income statement should contain a description of the nature of the event after the reporting date and an assessment of its consequences in monetary terms. If it is not possible to evaluate such events after the reporting date in monetary terms, then this should be recognized in the notes to the balance sheet.

DISCLOSURE OF INFORMATION AFTER THE REPORTING DATE

Significant event after the reporting date is subject to disclosure in the financial statements for the reporting year, regardless of its positive or negative nature for the organization. The consequences of an event after the balance sheet date are disclosed in the financial statements by updating the entity's related assets, liabilities, equity, income and expenses, or by disclosing related information.

An event after the balance sheet date is material if, without knowledge of it, users of financial statements cannot reliably assess the financial condition, cash flow or performance of the organization. The organization determines the materiality of the event after the reporting date independently.

When preparing financial statements, an entity evaluates the monetary consequences of an event after the reporting date. To evaluate in monetary terms the consequences of an event after the reporting date, it is necessary to make a calculation, as well as confirm it.

Disclosure of information refers to the reflection of information in the explanatory note included in the financial statements, i.e. in the most arbitrary, textual form. Assets, equity, income and expenses should be disclosed in the financial statements taking into account events after the balance sheet date. At the same time, events after the reporting date are reflected in synthetic and analytical accounting by the final turnover of the reporting period before the approval of the annual financial statements in the prescribed manner.

The procedure for calculating and reporting in the financial statements the consequences of events after the balance sheet date is established by IFRS No. 10 "Contingencies and events occurring after the balance sheet date". An event after the reporting date that indicates the occurrence of business transactions after the reporting date is disclosed in the notes to the balance sheet and income statement. In the same manner, annual dividends recommended or declared in accordance with the established procedure based on the results of the organization's work for the reporting period are reflected in the financial statements.

When an event occurs after the reporting date in the period following the reporting period, a record is made that reflects this event.

Information disclosed in the notes to the balance sheet and income statement includes a brief description of the nature of the event after the balance sheet date and an estimate of its monetary impact. If it is not possible to estimate the consequences of an event after the reporting date in monetary terms, then the entity should indicate this.

GENERAL PROVISIONS IFRS No. 11 CONTRACTS

Purpose of IFRS No. 11 - determination of the procedure for recognition of income and costs under construction contracts. A feature of accounting for construction contracts is the need to allocate revenue and costs according to the accounting periods in which construction was carried out.

Construction contract - an agreement providing for the construction of an object or a group of objects. Objects must be interconnected or interdependent in terms of design, construction technology, and final destination. The principles of IFRS No. 11 Contract for Work are applied to each contract separately. A group of contracts can be considered as a single construction contract if the group is negotiated as a single package. At the same time, the contracts must be executed simultaneously or sequentially without any interruption. As a separate contract elements are considered when :

1) the contract includes several objects and a separate proposal is submitted for each of them;

2) the contract provides for the construction of an additional facility that is not part of the original contract. The price of the object does not depend on the price of the original contract.

IFRS No. 11 discloses accounting for revenue and costs under construction contracts in the following respects:

1) provision of services related to the construction of the facility;

2) destruction or restoration of objects.

Contract types:

1) contracts with a fixed price. Have a fixed contract price or a rate that may change due to rising costs;

2) "Cost plus" contracts. When concluding a contract, the contractor is reimbursed for the costs under the contract and a percentage of the costs or a fixed remuneration.

When the outcome of a contract can be measured reliably, income and costs relating to the contract should be recognized as income and expenses, as appropriate, by reference to the stage of completion of the contract at the balance sheet date. Criteria for determining the stage of completion of work:

1) the share of costs incurred in the total estimated costs under the contract;

2) the result of monitoring the work performed;

3) the fact of completion.

An entity is required to disclose the methods for recognizing contract revenue recognized during the period and the methods for determining the stage of completion of contracts. In the balance sheet and notes reflect:

1) the amount of the advance payment received;

2) the amount of retained funds;

3) unfinished costs;

4) the amount of the customer's debt;

5) obligations to the customer;

6) conditional profits and losses.

For contracts in progress, entities disclose total costs and benefits to date, advances received, and retentions.

REVENUE AND COSTS UNDER CONSTRUCTION CONTRACT

According to IFRS No. 11 "Construction Contract", revenue from a construction contract includes:

1) the initial agreed amount under the contract;

2) deviations from the terms of the contract, claims, incentives to the extent that it is likely that they will be implemented and reliably evaluated.

Valuation of revenue under a construction contract may be affected by various factors depending on future events. This results in revenue estimates being revised frequently and may increase (change) in one period compared to another.

Factors affecting revenue estimation:

1) deviations from the terms of the construction contract . They arise at the direction of the customer to change the range of work under the contract (change in characteristics, design, purpose of the object during the term of the contract);

2) claims , representing the amounts that the construction organization plans to receive from the customer as reimbursement for costs not included in the price of the contract (delays in work due to the fault of the customer, erroneous technical specifications, etc.);

3) encouragement - amounts paid to the construction organization at the time of the contract. Arise in the event that the standards for the performance of work established by the contract are met or exceeded (early completion of work, etc.).

Contract costs include:

1) costs directly related to the contract. They include workers' wages; the cost of the materials used; depreciation of fixed assets; costs for design and technical support, which are directly related to the contract; the cost of moving machines and mechanisms; the cost of renting machinery and equipment, etc.;

2) costs reimbursed by the customer under the terms of the contract. Includes a portion of general administrative and development costs;

3) costs that relate to the contract as a whole (environmental protection, insurance, technical support costs not related to a specific contract, etc.).

The organization cannot include the following costs in construction costs:

1) general administrative expenses;

2) implementation costs;

3) depreciation of idle machines, mechanisms and equipment not used under this agreement;

4) development costs that are not reimbursed under the terms of the contract.

Costs relate to the construction contract from the moment the contract is signed until it is fully completed. If the costs were incurred to complete the construction contract, they may also be included as part of the costs. Condition - they must be determined separately, reliably measured.

RECOGNITION OF INCOME AND EXPENSES UNDER CONSTRUCTION CONTRACT

According to IFRS No. 11 it is necessary to recognize income and expenses on construction contracts. Revenue and costs arising from a construction contract are recognized as revenue and expenses when the outcome of the contract can be measured reliably. It is imperative to take into account the stage of completion of work under the contract at the reporting date. Evaluation of the result under a construction contract with a fixed price is possible under the following conditions: 1) a reliable and reliable estimate of the total revenue under the contract; 2) the likelihood that the enterprise can receive economic benefits under this contract; 3) the ability to accurately determine, at the reporting date, the costs under the construction contract that must be incurred to complete it; 4) the ability to accurately determine the stage of completion of work under the contract; 5) the possibility of comparing the costs of the construction contract with previously made estimates.

The results of a cost plus contract can be measured reliably when two conditions are met:

1) the enterprise should receive economic benefits under the construction contract;

2) the costs incurred must be reliably estimated.

If an entity incurs a loss under a construction contract, it is recognized as an expense. If the outcome of a construction contract cannot be estimated reliably, an entity may recognize revenue only to the extent that the costs incurred are more likely to be recovered. Construction contract costs are recognized as an expense only in the period in which they are incurred.

Ways to determine the stage of completion of work:

1) determination of the costs incurred as of the reporting date in proportion to the sum of the total construction costs;

2) the actual calculation of the share of work performed under the contract;

3) supervision of work.

The enterprise chooses the method that will most reliably measure and evaluate the work performed.

The following costs do not reflect the degree of work performed:

1) contract costs that relate to future activities under the construction contract;

2) advance payments to the subcontractor under subcontracts.

If it is probable that contract costs will exceed revenue, the resulting loss is recognized as an expense. The amount of the expected loss is determined regardless of the stage of completion of the work under the contract, whether work has begun under the contract or not. Contract costs, if it is not probable that they will be recovered, should be recognized as an expense. These include costs under contracts that are not legally justified, the implementation of which depends on a court decision, etc.

GENERAL AND PURPOSE IFRS 12 INCOME TAXES

Purpose of IFRS No. 12 Income Taxes - determination of the procedure for accounting for income taxes. The standard defines the basis for accounting for current and future tax consequences. An entity shall account for the tax consequences of transactions and events in the same manner in which those events and transactions are accounted for. IFRS No. 12 addresses all income taxes.

Basic definitions :

1) accounting profit - net profit (loss) for the reporting period before the deduction of tax expenses;

2) current tax - the amount of taxes payable in respect of taxable profit or recoverable in respect of tax loss for the period;

3) deferred tax - the amount of taxes recoverable or payable in future periods in respect of temporary differences, tax loss carry forward, unused tax credits for future periods;

4) temporary differences - the sum of the difference between the tax base of an item and its book value. Types temporary differences - taxable temporary differences (give rise to taxable amounts in future periods); - deductible temporary differences (resulting in amounts that are deductible from deferred taxable income);

5) the tax base asset or liability - the amount that is assigned to an asset or liability for tax purposes.

In the financial statements, the main components of the tax expense or tax refund are disclosed separately. They are include :

1) current tax expenses or income;

2) adjustments to current tax for prior periods recognized in the reporting period;

3) amounts of deferred tax expense or tax refund that are associated with the formation (reversal) of temporary differences;

4) amounts of deferred tax expense or tax refund that are associated with changes in tax rates;

5) deferred tax expense that may arise due to partial write-off (recovery) of the previous partial write-off of a deferred tax claim. IAS 12 specifies that an entity calculates accounting profit from its activities. For the purposes of tax accounting, the income tax base is calculated according to the principles of tax legislation, since the principles of accounting and tax accounting differ. This may lead to discrepancies. As a result, the income tax payable for the reporting period will be different from the tax attributable to accounting profit. The amount of the difference is paid in subsequent periods, although it refers to the reporting period.

Income tax expenses are reflected in the reporting period to which they relate.

CONCEPT AND RECOGNITION OF CURRENT TAX LIABILITIES

Current tax liabilities and assets are measured in accordance with applicable law at the amount that the entity expects to pay or recover.

Current tax under IFRS No. 12 "Income Tax" for the reporting and previous periods must be recognized as a liability equal to the unpaid amount. When the amount paid exceeds the amount payable, the excess is recognized as an asset. A tax loss benefit can be carried forward to offset current tax. In this case, the benefit should be recognized as an asset. The recognition period is considered to be the moment the tax loss occurs, since it is most likely that benefits will arise that can be measured reliably and accurately.

Current and deferred taxes are reflected as income and expenses and are included in the calculation of net profit for the reporting period. Exceptions :

1) the company records taxes directly as part of its capital;

2) taxes were formed as a result of the acquisition of the enterprise.

The assessment of short-term and deferred tax claims is carried out using the current tax rates and in accordance with the requirements of tax legislation. Sometimes a declared tax rate may apply (subject to government guidance and tax law requirements).

An entity may offset current tax assets and current tax liabilities. This is possible if the following conditions :

1) the entity has a legally established right to set off the recognized amounts;

2) the enterprise will settle by offsetting counterclaims;

3) the entity intends to realize the asset and settle the liabilities at the same time.

Current tax assets and liabilities are recognized and measured separately, subject to these conditions in the balance sheet, they are offset.

IAS 12 Income Taxes states that an entity may report current tax liabilities and current tax assets on a net basis. Mandatory conditions :

1) current tax liabilities and current tax assets belong to the same budget;

2) the entity will pay or replace the difference between the asset and the liability:

3) the entity intends to offset the liability against the amount of the asset.

Tax claims and tax liabilities are presented in the balance sheet separately from other assets and liabilities. Current tax assets and liabilities are disclosed separately from deferred tax assets and liabilities.

SCOPE OF IFRS 14 SEGMENT REPORTING

Purpose of IAS 14 Segment Reporting is to provide users of financial statements with the following capabilities:

1) analysis of the main activities of the company;

2) assessment of risks and profitability of the company;

3) the possibility of making adequate decisions for the future.

Segmentation - the type of analysis of the information contained in the financial statements, in accordance with the various types of products, works, services and the geographical area in which the company operates.

In accordance with IFRS No. 1, segmentation is distinguished by activity, geography and reporting.

Activity segment - a structural element that produces homogeneous products and differs from other segments in that it is subject to different risks and has a different level of profitability.

Criteria for the allocation of business segments:

1) type of products, works, services;

2) type of buyer of products, works, services;

3) the nature of the production process;

4) methods of selling products, works, rendering services.

Geographic segment - a part of companies established in a particular area that produces products or provides services in economic categories and differs from other segments in that it is subject to other risks and has a different level of profitability.

Criteria for allocation of geographical segments:

1) similarity of business transactions;

2) the similarity of economic and political conditions

viy;

3) the relationship between business transactions and geographic areas;

4) risks associated with business transactions.

Reportable segment - segment, information about which is included in the financial statements. This may be either a business segment or a geographic segment, depending on how they meet the disclosure requirements of this standard.

Segment revenue - the company's income reflected in the income statement that is directly related to a particular segment, including income from the sale of products, works, services to other segments and third parties. Segment income does not include the result of unforeseen circumstances, interest and dividend income.

Segment expenses - expenses arising from the company's core business that are directly attributable to the segment, including expenses from sales to other segments and third parties. Segment expenses do not include contingency expenses, interest payable, tax expenses, general and administrative expenses.

The Company independently determines the reportable segments that it includes in its financial statements.

HOW THE SEGMENTS ARE DEFINED

When extracting information by segments, taking into account general economic, currency, credit, price, political risks to which the organization's activities may be exposed. Risk assessment when highlighting information by segments does not imply an accurate quantitative measurement and expression of them.

When determining operating segments several types of goods, works, services are combined into a homogeneous group, which must comply with the following factors:

1) purpose of goods, works, services;

2) methods of sale of goods and distribution of works, services;

3) the system for managing the activities of the organization;

4) the process of production of goods, performance of work, provision of services;

5) consumers or buyers of goods, works, services.

When setting selection criteria for operating segments classifiers must be used:

All-Russian product classifier OK 00593, approved by the Decree of the State Standard of Russia dated December 30.12.1993, 301 No. 00493; All-Russian classifier of types of economic activity, products and services OK 06.08.1993, approved by the Decree of the State Standard of Russia of 17/XNUMX/XNUMX No. XNUMX.

When determining geographic segments, you should be guided by the following information:

1) currency risk;

2) currency control rules;

3) similarity of activity;

4) the risks that are inherent in the activities of the organization in a given geographic region;

5) availability of connections in different geographical regions;

6) the general conditions of the economic and political systems of the state in which the organization operates.

In accordance with the organizational structure of the organization, information on geographical segments is allocated by the location of the assets or by the location of the sales markets.

The conditions under which an operating or geographic segment is considered a reportable segment:

1) segment assets account for at least 10% of the total assets of all segments;

2) the profit or loss from the activity of this segment is at least 10% of the total profit or total loss of all segments;

3) revenue from sales to external buyers and from transactions with other segments of this organization is at least 10% of the total revenue of all segments.

Reportable segments identified in the preparation of an entity's financial statements must account for at least 75% of the entity's revenue.

If reportable segments account for less than 75% of revenue, then additional reportable segments must be identified.

When preparing financial statements in accordance with IFRS No. 14 Segment Reporting, there must be consistency in identifying reportable segments.

IFRS No. 16 Property, Plant and Equipment: GENERAL PROVISIONS, PURPOSE

Purpose of IFRS 16 Property, Plant and Equipment is to determine the accounting treatment of fixed assets. This is necessary for users of financial statements to obtain information about an entity's investments in property, plant and equipment and changes in these investments.

Fixed assets - this is a part of property used as means of labor in the production of products, performance of work or provision of services, or for the management of an organization for a period exceeding 12 months.

IFRS does not apply to:

1) biological assets related to agricultural activities;

2) rights to use subsoil and minerals.

This standard can be applied to property, plant and equipment that is used to develop and secure biological assets and rights to use subsoil and minerals.

The main questions in the accounting of fixed assets:

1) recognition of assets;

2) determination of the book value of assets;

3) depreciation;

4) impairment losses.

An item of property, plant and equipment that can be recognized as an asset is measured at cost.

Initial cost - the amount of cash or cash equivalents paid to acquire an asset at the time of its acquisition or construction.

The initial cost of an item of property, plant and equipment includes:

1) the purchase price;

2) costs directly attributable to the delivery of the asset and bringing it into a condition that ensures its operation;

3) an initial assessment of the costs of dismantling and removal of the fixed asset and restoration of natural resources in the area occupied by it.

Financial statements presented in accordance with IFRS must contain the following information:

1) assessment of the gross book value;

2) depreciation methods;

3) depreciation rates;

4) gross book value and accumulated depreciation;

5) reconciliation of the book value at the beginning and end of the period, which reflects the receipt, disposal, revaluation, depreciation of fixed assets, exchange rate differences when recalculating indicators.

Financial statements under IFRS No. 16 Property, Plant and Equipment must disclose:

1) the cost of fixed assets pledged; 2) the amount of expenses recognized in the book value of fixed assets during its construction; 3) the amount of compensation provided by third parties in connection with the depreciation, loss or transfer of fixed assets; 4) the amount of contractual obligations for the acquisition of fixed assets; 5) the amount of depreciation; 6) the amount of accumulated depreciation at the end of the reporting period.

VALUATION OF FIXED ASSETS

In accordance with IFRS No. 16 Property, Plant and Equipment all items of property, plant and equipment recognized as an asset must be measured at cost.

Initial cost elements:

1) purchase price; 2) delivery costs directly attributable to the cost of fixed assets; 3) dismantling costs.

Costs included in the cost of fixed assets:

1) the cost of delivery, unloading, installation and assembly;

2) the cost of paying benefits to employees directly involved in the acquisition and installation of the purchased property, plant and equipment (in accordance with IFRS No. 19 Employee Benefits);

3) site preparation costs;

4) the cost of checking the operation of the fixed asset.

Costs not included in the price

fixed assets:

1) the costs of doing business;

2) the costs of opening a new production or technical facility;

3) the cost of introducing a new product or service;

4) administrative and overhead costs.

The cost of an item of property, plant and equipment is its price at the date of recognition. An entity should reflect the accounting policy for property, plant and equipment and apply it to all items of property, plant and equipment.

Fixed asset accounting models:

1) at the initial cost; 2) by revaluation.

According to the cost accounting model an item of property, plant and equipment should be accounted for at cost. Revaluation of fixed assets should be carried out regularly. The frequency of revaluations depends on changes in fair value. If the fair value differs from the carrying value, an additional revaluation is required.

fair value - this is the amount for which an asset can be exchanged in a transaction between well-informed and independent parties. If a single item of fixed assets is revalued, then all fixed assets from this class must be subject to revaluation.

Asset class - a group of assets that is identical in content and nature of use.

In accordance with IFRS No. 16 Property, Plant and Equipment revaluation of property, plant and equipment within the same class is made simultaneously to avoid selective revaluation and to include in the financial statements amounts that represent a mixture of costs and values at different dates. If an asset's carrying amount increases as a result of the revaluation, then the increase must be recognized in equity in the line "revaluation surplus". If an asset's carrying amount decreases as a result of the revaluation, it must be shown in profit or loss.

DEPRECIATION METHODS

Depreciation - systematic and economically justified write-off of the cost of an asset during its useful life. Depreciation is recognized as an expense. Periodic write-downs of an asset help ensure that income and expenses match. During the life of an asset, its usefulness may decline due to wear and tear. Depreciation does not result in an accumulation of cash sufficient to replace the asset.

When calculating depreciation, the following indicators are used:

1) initial cost;

2) useful life;

3) liquidation value.

Depreciation methods:

1) linear method. The annual depreciation charge remains the same over the useful life of the asset. The method is easy to apply and matches income and expenses when the operation of the asset is more or less even over its useful life;

2) write-off method based on the sum of numbers of years of useful life (sum of numbers method). The annual depreciation amount is determined based on the initial cost of the object and the depreciation rate. Depreciation rate is calculated by dividing the number of years remaining until the end of the useful life of the object by the sum of the numbers of years of useful life;

3) depreciation method in proportion to the volume of production . The service life is presented as an expected production volume, not a period of time.

The complexity of the application of the method is associated with the calculation of the expected volume of production. When the performance of an asset varies significantly over different periods, this method is the best match between income and expenses;

4) diminishing balance method . The annual depreciation charge decreases over the useful life of the asset. Under this method, the depreciation rate remains unchanged, and the residual value becomes smaller every year. The method ensures compliance with the principle of matching income and expenses, since the higher level of depreciation accrued in the early years corresponds to the greater economic benefits received during this period. This is the most appropriate method for assets that are subject to rapid obsolescence due to scientific and technological progress.

According to IFRS No. 16 any of these methods may be used. When choosing a depreciation method, management must take into account the conditions of the organization's business activities. The depreciation method chosen must be applied from year to year.

DISCLOSURE OF INFORMATION ON FIXED ASSETS IN THE FINANCIAL STATEMENTS

In accordance with IFRS No. 16 Property, Plant and Equipment an item of fixed assets must have a material form, be acquired for use in the course of the company's operation, be used for a long period of time (more than one year) and bring economic benefits to the organization. According to IFRS, fixed assets are carried at cost.

Asset classes:

1) land plots;

2) machinery and equipment;

3) land plots and buildings;

4) watercraft;

5) aircraft;

6) vehicles;

7) furniture and built-in elements of engineering equipment.

Key disclosure requirements for financial statements:

1) profit and loss statement: depreciation charges for each class of assets; the impact of significant changes in the valuation of property, plant and equipment;

2) balance sheet and notes: gross book value of assets minus depreciation charges for each class of assets at the beginning and end of the period; a detailed reconciliation of changes in carrying amount throughout the period; the amount of fixed assets in the process of construction; fixed assets pledged as security for obligations; capital commitments for the acquisition of fixed assets; accounting policy; valuation methods for each asset class; depreciation methods and rates for each asset class.

If there is a revaluation of fixed assets, then additional information must be provided for these amounts.

Ways of disposal of fixed assets: write-off; sale; exchange.

The rules for determining profit or loss in the exchange of fixed assets depend on the nature of the exchanged funds. If no profit or loss is recognized as a result of the exchange of property, plant and equipment, the value of the funds received is adjusted by their cost. As a result of the exchange of similar assets, no gain or loss is recognized. The cost of the new asset is assumed to be equal to the carrying amount of the transferred asset. The fair value of the asset received indicates that the asset given up is impaired.

Upon disposal of an item of property, plant and equipment determine its residual value. If the asset is disposed of during the year, then it is necessary to calculate and record depreciation for the period from the beginning of the year to the date of disposal.

When selling fixed assets, the residual the value of the asset is compared with the proceeds from the sale. If the proceeds from the sale of fixed assets exceed the residual value, then the accounting must reflect the gain on disposal

IAS 17 Leases: GENERAL AND SCOPE

used to record lease transactions. IFRS No. 17 Lease Accounting. It explains to lessees and lessors the accounting policies and disclosures that apply to different types of liabilities. The standard applies to all types of leases under which the lessor transfers to the lessee in exchange for payment the right to use an asset for a specified period. This standard should be used by enterprises for reporting for periods starting from 01.01.2005/XNUMX/XNUMX. IFRS 17 Leases apply for all types of rent, but :

1) lease agreements for exploration and use of natural resources;

2) licensing agreements for certain objects (patents, copyrights, etc.).

define :

1) rent - a written agreement between the parties, under which the lessor transfers to the lessee the right to use the asset for a certain period of time. Under the contract, the tenant is obliged to pay rent to the landlord;

2) non-cancellable lease - a lease that cannot be cancelled. Exceptions: the occurrence of an unlikely event; indication of the lessor; re-entering into a lease agreement for the same asset with the same lessor;

3) lease acceptance date - the date of the lease agreement or the date of acceptance by the parties of the obligations specified in the lease agreement;

4) rental period - the period for which the lessee leases the asset;

5) conditional rent - the part of the lease payments that is not fixed in the form of a certain amount, based on the future value of a factor, the change of which is not related to the passage of time.

Indicators used for valuation of the lease:

1) gross investment in rent - the totality of the lease payments that the lessor receives and the non-guaranteed salvage value that will be due to the lessor;

2) net investment in rent - gross investment in the lease, which is discounted at the rate of interest under the lease;

3) received financial income;

4) minimum rental payments - regular payments collected from the tenant (with the exception of amounts paid by the landlord in the form of taxes, services and compensated by the tenant) during the lease term;

5) guaranteed residual value;

6) non-guaranteed salvage value - part of the liquidation value, the receipt of which is not guaranteed by the lessor;

7) fair value of assets at the beginning of the lease - the cost for which it is possible to exchange an asset (settle a liability) in a transaction between independent parties who must be well aware of the transaction.

RENTAL CLASSIFICATION

Classification of a lease occurs at the beginning of its term. The classification is based on the extent to which the risks and rewards are shared between the lessee and the lessor. Risks include losses resulting from idle capacity, obsolete technology, and revenue variances caused by changes in economic conditions.

Benefits include the expectation of profitable transactions during the economic life of the asset.

Types of rent under IFRS No. 17 "Leases":

1) financial lease. Such a lease transfers substantially all the risks and rewards incidental to ownership of the asset.

Ownership of an asset may or may not be transferable;

2) operating lease. Includes all other rentals. A lease may be classified as an operating lease if it does not involve a significant transfer of risks and rewards.

A lease may be treated as a finance lease when a number of conditions :

- by the end of the year of the lease term, ownership of the asset passes to the lessee;

- the lessee has the right to buy the asset at a price that is significantly less than the fair value at the date that the option is exercised;

- the lease term is for the majority of the economic life of the asset;

- the leased assets are specific and suitable only for the lessee;

- it is possible to rent for a secondary period at a price significantly lower than the market price.

The criteria for classifying a lease as a finance lease are only qualitative, which often leads to difficulties in determining the type of lease. If during the term of the contract there is a change in any conditions that lead to a change in the classification of the lease, then it is necessary to reclassify.

Lease payments are recognized in the income statement. An asset leased under a finance lease taken into account as follows :

1) at the inception of the lease, the asset and the associated liability for future lease payments are recognized in equal amounts;

2) initial direct costs associated with leasing activities are included in the cost of the leased asset;

3) rent payments include financing costs. Finance cost is a constant periodic rate of interest accrued on the remaining balance of the liability for each period during the lease term; reduction of the outstanding obligation.

The classification of leases into finance leases and operating leases depends on the nature of the transaction and not on the legal form of the contract.

Leases of land and buildings are classified as finance or operating leases in the same way as other leases.

LEASE IN THE FINANCIAL STATEMENTS OF TENANTS

Financial lease IFRS 17 Leases requires lessees to recognize finance leases as an asset and a liability in their financial statements at the beginning of the lease term at amounts equal to the fair value of the leased property or, if less, the present value of the minimum lease payments. Direct costs that are directly attributable to obtaining a finance lease are included in the cost of the asset. Depreciation is recognized as an expense for the relevant period, depending on the depreciation method adopted. The depreciation amount is allocated to each accounting period over the expected life of the asset.

If it is certain that the lessee will obtain title to the asset by the end of the lease term, then the period of expected use is the useful life of the asset. If there is no such certainty, then the asset is depreciated over a shorter period - the lease term or useful life.

Interest payments are distributed by one of the following methods during the term of the lease:

1) cumulative method;

2) actuarial method.

IAS 17 specifies that a lessee must report the following: finance lease information :

1) the net carrying amount at the reporting date for each asset class;

2) the total amount of future minimum payments at the reporting date, the present value for periods no later than one year; after one year, but not later than five years; after five years;

3) the total amount of future lease payments under the sublease;

4) conditional rent, which is recognized as an expense in the reporting period;

5) description of significant lease agreements.

Operating lease Lease payments under operating leases are recognized in the lessee's financial statements as an expense that is spread evenly over the lease term. IAS 17 specifies that lessees must report the following: operating lease information :

1) the total amount of future minimum lease payments under non-cancellable operating lease agreements for each of the following periods: no later than one year; after one year, but not later than five years; after five years;

2) the total amount of future minimum sublease payments expected to be received as of the reporting date under non-cancellable contracts;

3) a general description of significant lease agreements;

4) lease and sublease payments that are recognized as income for the period (the amounts for minimum lease payments, conditional rent, sublease payments are disclosed separately).

LEASE IN THE FINANCIAL STATEMENTS OF THE LESSOR

Financial lease Lessors recognize assets held under finance leases in the balance sheet as receivables at an amount equal to the net investment in the lease. The risks and rewards associated with ownership of an asset under a finance lease are recognized by the lessor as a principal repayment and finance income. The recognition of finance income is based on a pattern that reflects a constant periodic rate of return on the lessor's outstanding net investment in the finance lease. The lessor's costs associated with the preparation of the lease must be recognized as an expense at the start of the lease.

Profit or loss for the reporting period is recognized in accordance with the entity's established accounting policies.

Landlords must report the following: information under finance lease:

1) a reconciliation between the amount of the gross investment in the lease at the reporting date and the present value of receivables for minimum lease payments at the reporting date. This information is reflected for each of the periods: no later than a year; after one year, but not later than five years; after five years;

2) non-received financial income;

3) conditional rent, which is recognized as income in the reporting period;

4) a general description of significant lease agreements;

5) non-guaranteed salvage value, which accumulates to the benefit of the lessor;

6) the accumulated valuation reserve to cover the outstanding debt on minimum lease payments.

Operating lease

Assets transferred to operating leases are reflected in the balance sheet by lessors. Operating lease income is recognized as an expense on a straight-line basis over the lease term. The costs incurred in obtaining rental income, the lessor must include in expenses. The initial direct costs associated with preparing a lease are included in the carrying amount of the leased asset and recognized as an expense over the lease term. The peculiarity of accounting for operating leases: profit from sales by the lessor is not recognized.

IFRS No. 17 specifies that a lessor must disclose the following information in the financial statements:

1) future minimum lease payments under non-cancellable operating leases. This information is reflected as a whole and for each of the periods: no later than a year; after one year, but not later than five years; after five years;

2) the total conditional lease, which is recognized as income for the reporting period;

3) description of significant lease agreements.

GENERAL IFRS 18 REVENUE

Objective of IFRS 18 Revenue consists in determining the procedure for accounting for revenue that arises from certain types of operations.

Revenue - the gross inflow of economic benefits during the reporting period that arise in the ordinary course of business in the form of capital increases. Revenue should be measured at the fair value of the consideration received or receivable. The amount of proceeds that arose from the transaction is determined by the contract between the company and the buyer or user of the asset. In doing so, the following should be taken into account Criteria 1) when determining fair value, discounts should be excluded; 2) when goods and services are exchanged for goods and services similar in nature and value, no revenue is recognized; 3) when goods and services are exchanged for goods and services that are different in nature and value, revenue is recognized at fair value; 4) deferral of receipt of funds is a financial transaction, in such cases it is necessary to determine the interest rate.

According to IFRS No. 18 "Revenue" An entity shall disclose the following information in its financial statements:

1) the accounting policy adopted for the recognition of revenue;

2) the amount of proceeds from the exchange of goods and services included in each significant category of proceeds;

3) the amount of each significant category of revenue recognized during the period that arose from: the sale of goods; provision of services; dividends; percent; license fees.

This Standard does not apply to revenue that arises from: leases (under IAS 17 Leases) and investment dividends, which are accounted for under the equity method of accounting (under IAS 28 Accounting for Investments in Associates).

Conditions under which revenue is recognized in the financial statements:

1) the risks and rewards associated with ownership of the goods are transferred to the buyer;

2) the company does not control the goods sold;

3) the amount of revenue can be estimated;

4) the costs associated with the operation can be measured;

5) it is probable that the economic benefits associated with this transaction will flow to the company.

Revenue generated from the use of company assets by others yielding interest and dividends should be accounted for as follows: dividends are established when the right of shareholders to receive payments is determined; interest is based on a time-proportional basis. In the income statement, which is prepared in accordance with IFRS, it is necessary to disclose the amount of revenue for each type of sale.

OBJECTIVES OF IFRS 19 EMPLOYEE BENEFIT

Purpose of IFRS 19 Employee Benefits - establishment of the procedure for accounting and disclosure of information on remuneration to employees. An entity shall recognize a liability if an employee provides services in exchange for future benefits or an expense if the entity receives economic benefits from the employee providing services in exchange for benefits.

Employee benefits - all forms of remuneration and payments made by the organization to employees for services rendered by them, work performed.

Types of employee benefits:

1) short-term employee benefits - employee benefits that are paid within 12 months after the end of the period in which employees rendered services or performed work. These include wages, social security contributions, paid annual leave, paid sick leave, non-monetary benefits (medical care, housing, etc.);

2) remuneration upon termination of employment. These include pensions, life insurance, post-employment health care. Post-employment benefit plans - agreements on the basis of which the organization pays remuneration to the employee upon termination of employment;

3) long-term employee benefits. These include payments for more than 12 months after the end of the period, for example, paid leave for employees with a long work experience, etc.;

4) severance pay. Paid if the organization intends to dismiss the employee before he reaches retirement age or the employee decides to quit voluntarily;

5) compensatory payments with equity instruments - payments that give an employee the right to receive equity financial instruments of the organization, or the amount of the organization's obligations to employees, which depends on the future price of equity financial instruments of the organization.

Equity Compensation Plans - agreements under which the entity makes compensation payments in equity instruments. The requirements of IFRS No. 19 are applied by an entity to all employee benefits. They may be provided by agreements between the organization and workers; legal requirements; established practice of the organization.

IFRS No. 19 defines the following working conditions : 1) full employment; 2) part-time employment; 3) work on a permanent basis; 4) one-time work; 5) temporary work.

Benefits may be paid to employees or dependents.

RECOGNITION AND EVALUATION OF SHORT-TERM EMPLOYEE BENEFIT

Short-term employee benefits - employee benefits that are paid in full within 12 months after the end of the period in which the employee rendered services, performed work. Termination benefits and compensation payments in equity instruments paid during this period are not classified as short-term benefits.

According to IFRS No. 19 Employee Benefits Short term benefits include: wages; social security contributions; short-term paid vacations (if the vacation is granted within 12 months after the end of the period in which services were provided, work was performed); bonuses paid within 12 months after the end of the period in which the employee rendered services; remuneration in kind.

Types of short holidays :

1) accumulated. These holidays can be carried over to future periods if they were not used in the period in which they were earned;

2) non-accumulative.

For cumulative paid holidays, an entity recognizes the expected cost of benefits when employees provide services that increase their entitlement to future paid holidays. The organization evaluates these costs as an additional amount that is expected to be paid to the employee for the unused vacation accumulated at the reporting date. If the vacation is non-accumulative, then the cost should be recognized when the vacation occurs. The employee does not have the right to transfer non-accumulative paid holidays to future periods.

Types of accumulated holidays:

1) compensated. In this case, the employee has the right to receive compensation for unused vacations;

2) non-compensated. The employee is not entitled to receive monetary compensation for unused vacations.

If employees provide services that increase the duration of future paid holidays, then the employer has an obligation to the employee. But since the obligations must be paid within 12 months, they are not discounted.

An entity shall recognize the expected costs of profit sharing and bonus payments when: conditions :

1) the organization has an obligation to make payments (secured by agreement, legislative acts, etc.);

2) the liability can be measured reliably. Obligations under profit sharing plans and bonuses arise from the provision of services by employees. This allows these costs to be recognized as an expense rather than as a distribution of net income.

TERMINATION PAYMENTS

Severance pay - employee benefits that are paid upon the occurrence of the following events:

1) dismissal of an employee before reaching retirement age;

2) voluntary dismissal of an employee.

A prerequisite for the possibility of receiving severance pay is the termination of the employee's service.

Severance pay is paid based on a detailed severance pay plan. It includes the following information:

1) location of employees subject to dismissal;

2) functions of employees;

3) the number of employees to be laid off;

4) the amount of the severance pay for each of the posts;

5) the term for the implementation of the plan.

A detailed plan should be implemented as soon as possible to avoid additional changes. IAS 19 Employee Benefits specifies that if termination benefits are due more than 12 months after the balance sheet date, then the amount of the benefits must be discounted using a discount rate.

If severance pay is calculated for employees who have been asked to leave, then the pay is calculated based on the number of employees who are likely to accept the offer to leave. In a separate group, payments are allocated that the organization must pay to the employee, regardless of the reason for dismissal. These benefits must be paid on a mandatory basis, but the timing of their payment remains uncertain. These payments are called indemnity guarantees. Organizations usually account for these payments not as severance pay, but as post-employment benefits. An organization can set a lower level of remuneration for the dismissal of an employee of its own free will than for dismissal at the initiative of the employee. In this case, additional payments upon dismissal of an employee at the initiative of the organization are considered severance pay.

The entity recognizes termination benefits as an expense. If there is uncertainty about the number of employees who may leave and receive severance pay, then a contingent liability may arise.

The organization discloses the following information:

1) the fact of the occurrence of a conditional obligation;

2) separately the amount of severance pay for managerial personnel.

In certain cases, severance pay may include an increase in pension or other post-employment benefits (whether directly or through a pension plan), as well as the payment of wages before the end of a specified period of time.

END OF EMPLOYMENT BENEFIT

To employee benefits that are paid at the end of employment, include :

1) retirement benefits;

2) other benefits (life insurance, post-employment health care).

Post-employment benefit plans are agreements under which post-employment benefits are provided.

Distinguish the following types of pension plans :

1) defined contribution plans . Upon termination of employment, the employee will receive an amount limited to the amount of contributions paid by the organization to the pension plan or insurance company. Actuarial and investment risks are borne by the employee. The obligations of the organization are determined in the amount of contributions for the reporting period. An entity cannot earn an actuarial gain (loss), so actuarial assumptions are not required to measure the liability or expense. If an employee provides services to the entity in the reporting period, the entity must recognize the contributions payable to the pension plan in exchange for the services. Contributions may be recognized as: an expense; liabilities, net of contributions previously paid.

If plan premiums are not paid in full within 12 months of the end of the service period, they are discounted;

2) defined benefit plans. There are: unfunded plans; fully funded; partially funded. At the end of employment, the employee receives the agreed amount of remuneration. Actuarial and investment risks are borne by the entity. An entity can earn an actuarial gain (loss), so actuarial assumptions are required to measure liabilities and expenses. The entity accounts for liabilities under the terms of the plan, as well as any contingent liabilities.

In its financial statements, a defined benefit plan entity discloses information :

1) the entity's accounting policy for actuarial gains and losses;

2) a description of the type of plan;

3) the present value of the obligations under the plan;

4) the fair value of the plan assets;

5) past service cost not recognized in the balance sheet;

6) expenses recognized in the profit and loss account under the following items: cost of current services; interest costs; expected return on plan assets; past service cost; actuarial gains (losses); the impact of the final settlement of the plan;

7) main actuarial assumptions (discount rates; expected rates of return on assets; expected wage growth rates, etc.).

RECOGNITION AND ASSESSMENT OF COMPENSATION PAYMENTS

Equity compensation payments - payments to employees, in which:

1) employees are entitled to receive equity financial instruments issued by the organization;

2) the amount of the organization's obligations to its employees depends on the future price of equity financial instruments issued by the organization.

According to IFRS No. 19 Employee Benefits compensation payments include :

1) shares, share options, which are issued to employees at a price below the fair value (the one at which they would be issued to third parties);

2) cash payments (their size depends on the future market price of the organization's shares).

An entity must disclose the following in its financial statements: information related to compensation payments:

1) the nature, terms of plans for compensation payments with equity instruments;

2) amounts recognized as equity instruments;

3) accounting policy governing the reflection of compensation payments;

4) the number, date, and exercise price of share options that are exercised in accordance with equity compensation plans during the reporting period;

5) the number of share options that expire during the reporting period;

6) the fair value of the organization's own equity financial instruments at the beginning and end of the reporting period;

7) the fact that the fair value of financial instruments cannot be determined;

8) the number and terms of own equity financial instruments owned by equity compensation plans at the beginning and end of the period. IFRS No. 19 establishes requirements only for disclosure of information about compensation payments by equity instruments, but does not determine the procedure for their recognition and measurement. Compensation payments have a significant impact on the financial position of the organization. The impact on the financial position is manifested in the need to issue financial instruments. Compensation plans can affect an organization's financial performance and cash flow by reducing the amount of cash and other benefits provided to employees in exchange for services. If an entity has multiple equity compensation plans, then information can be disclosed in several ways :

1) in general for the totality of plans;

2) separately for each plan;

3) by group of plans. The group can be formed according to the principle of the greatest usefulness of the plans for the organization during the reporting period.

IFRS 20 ACCOUNTING FOR GOVERNMENT SUBSIDIES AND DISCLOSURES

GOVERNMENT AID INFORMATION"

Purpose of IFRS No. 20 consists in describing the methods of accounting for state subsidies, which are received in various forms - in the form of financial assistance, technical supplies, subsidies, bonuses, grants, allowances. This Standard applies to the accounting and disclosure of government grants and the disclosure of other forms of government assistance.

State aid - these are government actions that are aimed at ensuring conditions for the receipt of specific economic benefits by an enterprise that meet certain criteria.

Government grants - state assistance, which is provided to the enterprise in the form of the transfer of resources in exchange for compliance with certain conditions related to its operations.

State appropriation - this is a form by which the state provides financial support to enterprises, including foreign exchange, from the state budget (public funds). Government appropriations appear in the form of subsidies, export premiums, etc.

This standard does not apply to:

1) special problems that arose when accounting for government subsidies in the financial statements;

2) state aid, which is presented to the enterprise in the form when calculating taxable profit;

3) state participation in the ownership of the enterprise.

The financial statements must disclose the following information:

1) the accounting policy that is adopted for government subsidies;

2) methods of presenting state subsidies;

3) the nature and amount of state subsidies;

4) forms of state aid;

5) contingent events that are related to state aid.

An entity applying IFRS 20 Accounting for Government Grants and Disclosure of Government Assistance for the first time should consider the following requirements:

1) fully comply with the disclosure requirements of the standard;

2) adjust the financial statements when changing accounting policies in accordance with IFRS No. 8 "Net profit or loss for the period, fundamental errors and changes in accounting policies";

3) apply accounting terms that relate to subsidies or their parts, subject to receipt or repayment.

PROCEDURE FOR RECORDING INFORMATION ABOUT STATE SUBSIDIES

Government grants - government assistance provided to an enterprise in the form of a transfer of resources in exchange for compliance with certain conditions related to its operations. Government grants do not include forms of government assistance that cannot be reasonably valued, nor transactions with the government that are no different from the normal trading activities of the enterprise.

Subsidies are not recognized until:

1) the company will not comply with the conditions associated with them;

2) subsidies will be received.

Government grants are recognized in the periods they offset. Government grants provided as compensation for expenses incurred should be recognized as income in the period in which the grant is received. A government grant may take the form of a transfer of a non-monetary asset (eg land). In such circumstances, it is necessary to measure at fair value. In some cases, an alternative approach is taken whereby the asset and the grant are recognized at nominal value.

Asset related subsidies - state subsidies, the main condition for which is that the enterprise receiving them must build and (or) acquire long-term tangible, intangible assets or investments.

Methods of presentation in the financial statements of grants that relate to assets:

1) the subsidy must be accounted for as deferred income;

2) the subsidy must be deducted to obtain the book value; therefore, the grant is recognized as income over the useful life of the depreciable asset.

Income related subsidies - government subsidies that are not treated as asset-related subsidies. Such grants are presented in the income statement as income as a general item or separately.

Subsidies cover some of the losses and expenses incurred at a time when freely determined prices cannot cover the costs incurred. The amount of subsidies can be equal to, less than or greater than the difference between the state-supported or guaranteed price and the level of market value. This amount ensures full coverage of the recognized cost and the receipt of incentive income.

Government grants are refundable and should be accounted for as a revision to an accounting estimate. The refund is made against the non-depreciable amount of deferred income generated in respect of the grant.

THE CONCEPTS "STATE AID", "NON-STATE SUBSIDIES"

State aid - these are government actions that are aimed at ensuring conditions for the receipt of specific economic benefits by an enterprise that meet certain criteria. State assistance does not include indirect benefits, the provision of which affects the general conditions for the functioning of enterprises, for example, the creation of infrastructure in developing regions (zones, counties), the establishment of trade restrictions for competitors, etc.

State assistance can take a variety of forms, differing both in the nature of the assistance provided and in the conditions associated with its provision.

Examples of assistance that cannot reasonably be valued are free technical and marketing advice and warranties. An example of assistance that cannot be separated from a company's normal trading operations is the government's purchasing policy, which covers a portion of the products sold. The existence of a benefit may be undeniable, but attempts to separate trading activity from state aid are a moot point.

The significance of the benefit is essential in the disclosure of information in the financial statements about the nature, extent and duration of the assistance provided. This is necessary in order not to mislead users of financial statements. Interest free or low interest loans are a form of government assistance. The benefit from this assistance is not measured by the interest rate.

State assistance does not include the provision of infrastructure by improving the transport network and communications.

Purpose of state aid is to interest the enterprise in obtaining the benefits provided or in developing activities that it would not normally be able to carry out if assistance were not provided.

To characterize the financial position and financial performance of the organization, it is necessary to disclose information on state assistance in the financial statements:

1) the nature and amount of state aid recognized in the reporting year;

2) appointment of state aid;

3) the nature of other forms of state assistance from which the organization directly receives economic benefits;

4) unfulfilled as of the reporting date the conditions for the provision of state assistance and related contingent liabilities and contingent assets

Non-state subsidies - this is assistance provided to an organization in the form of a transfer of resources in exchange for compliance with certain conditions associated with its activities.

IFRS No. 21 "IMPACT OF CHANGES IN EXCHANGE RATES"

IFRS No. 21 describes the procedure for recording transactions in foreign currency, accounting for positive and negative exchange rate differences, methods for recalculating financial statements prepared in foreign currency.

Exchange rate is the exchange rate of one currency for another.

Functional currency is the primary currency used in the environment in which the organization operates.

Exchange difference - the difference that arises as a result of the conversion of one currency into another.

Operations in foreign currency - operations denominated in foreign currency, including the purchase or sale of goods, works, services, obtaining and granting loans, the completion of outstanding foreign exchange contracts, the acquisition and sale of assets, the emergence and repayment of liabilities.

Recognition and valuation rules currency transactions:

1) recognition of the current exchange rate on the date of the transaction (rate spot);

2) if redemption did not occur in the same period in which the event occurred, then the corresponding monetary items should be recalculated at the final rate;

3) exchange differences arising from the calculation of monetary items or the translation of monetary items are recognized as profit or loss in the reporting period;

4) non-monetary items accounted for at the actual cost of the acquisition are reflected in the financial statements at the spot rate at the date of the transaction;

5) non-monetary items carried at fair value are reported at the spot rate at the measurement date;

6) in accordance with the permitted alternative accounting treatment, exchange differences resulting from a significant devaluation may, under strict conditions, be included in the carrying amount of the asset.

In reporting, the organization must disclose: the amount of exchange differences recognized as profit (loss); net exchange differences recognized in a separate component of equity, as well as a reconciliation of the amount of these exchange differences at the beginning and end of the reporting period.

If an entity reports in a currency other than its functional currency, then this fact must be reflected, as well as the reasons for these differences.

When restating the financial statements of a foreign company, use 2 methods :

1) final course method;

2) temporary method.

Translation rules :

1) all monetary items are recalculated at the final rate;

2) non-monetary items are recalculated at the date of their acquisition;

3) income statement items are translated at the exchange rate at the date of transactions or at any appropriate weighted average rate for the period.

SCOPE OF IFRS 23 BORROWING COSTS

Purpose of IAS 23 Borrowing Costs - determine the methods of accounting for loans. The standard requires borrowing costs to be recognized immediately as an expense. This Standard does not address costs in respect of share capital, including preference shares.

Borrowing costs - interest expenses of the company, which it has incurred when receiving borrowed funds.

Classified asset - assets, the preparation of which for the intended use or sale requires a significant amount of time.

Borrowing costs include:

1) interest on bank overdrafts and loans;

2) amortization of discounts or premiums associated with loans;

3) depreciation of additional costs;

4) exchange differences that arise as a result of loans in foreign currency;

5) payments on financial leasing.

Borrowing cost accounting methods:

1) primary - borrowing costs are recognized in the period in which they are incurred;

2) permissible - Borrowing costs are recognized in the period in which they are incurred, but the exception is the part of the costs that can be capitalized. Borrowing costs that are associated with the acquisition, construction or production of a classified asset may be capitalized if it is probable that they will result in economic benefits and the costs can be measured.

Positive aspects of capitalization:

1) borrowing costs form part of the acquisition costs;

2) costs included in expenses are correlated with deferred income;

3) capitalization of costs leads to greater comparability of acquired assets with those produced.

Negative aspects of capitalization:

1) the attempt to link borrowing costs to a particular asset is arbitrary;

2) attributing borrowing costs to expenses leads to more accurate results for comparison;

3) different methods of financing lead to different amounts of capitalization for the same asset.

Cases of termination of capitalization:

1) the asset is ready for the intended use or sale;

2) the construction of the object is partially completed, and its completed part can be used independently;

3) modification of the object is suspended for a long time.

The capitalized amount of costs for a period shall not exceed the amount of borrowing costs incurred during that period.

Financial statements in accordance with IAS 23 Borrowing Costs must disclose: the accounting policy adopted for borrowing costs; capitalization rate; the amount of borrowing costs capitalized for the period.

BORROWING COST ACCOUNTING PROCEDURE

In accordance with IFRS No. 23 "Borrowing costs" borrowing costs are accounted for using the main or alternate method.

According to the basic accounting procedure Costs are recognized in the period in which they are incurred.

With an alternative accounting method costs are recognized in the period in which they are incurred, with the exception of the capitalized part.

Borrowing costs that are directly attributable to the acquisition, construction and production of a qualifying asset are those costs that could have been avoided if they had not been incurred on the qualifying asset. If an entity borrows funds solely to acquire a qualifying asset, then the borrowing costs associated with that asset are clearly identified. These borrowing costs are to be determined as the actual costs during the period less the investment income from the temporary investment of these borrowed funds.

Financing arrangements for a qualifying asset give rise to borrowings and costs before the funds are used directly on that asset. In this case, the funds may be invested up to and including spending on the qualifying asset. In determining the amount of borrowing costs that can be capitalized during the period, any investment income received on such funds is deducted from the amount of borrowing costs incurred.

If the carrying amount or ultimate cost of a qualifying asset exceeds its recoverable amount or possible selling price, then the carrying amount is written off in whole or in part.

Capitalization of borrowing costs begins when:

1) there were expenses on this asset;

2) borrowing costs incurred;

3) work has begun to prepare the asset so that it can be used for its intended purpose.

Expenses on a qualifying asset include expenses that are denominated in cash. If grants have been received, the costs are reduced by the amount of those grants in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance.

Cost capitalization is suspended when asset modification activities are interrupted. Such costs include the costs of maintaining unfinished objects. These costs are not classified as capitalized. Capitalization of costs ceases when all necessary work to prepare the asset for use or sale has been completed. An object is considered ready for sale or use when its physical construction is completed.

OBJECTIVES of IAS 24 RELATED PARTY DISCLOSURES

Purpose of IAS 24 - determination of the procedure for disclosure of information about related parties in the financial statements of the organization.

This is necessary to draw attention to the possible influence of parties related to the organization. IFRS No. 24 is applied to the preparation of financial statements for periods starting from 01.01.2005/XNUMX/XNUMX.

This standard can be applied to:

1) identifying relationships and transactions with related parties;

2) identification of outstanding balances of mutual settlements with related parties.

In accordance with IFRS No. 24 Related Party Disclosures the financial statements must disclose information about the company's transactions with related parties. Relationships between related parties may affect transactions such as the purchase and sale of goods and services, the conclusion of management contracts and leasing agreements.

According to the standard, a party is considered related to the organization if it has the ability to control the other party, to influence the process of making financial and economic decisions. In this case, the related party participates in decision-making, but does not control the activities of the entity. Participation can be manifested by agreement of the parties or through equity participation.

Examples of non-affiliated organizations: trade unions, utilities, etc.

Transactions between related parties - transfer of resources, services, obligations between related parties. Relationships with related parties affect the financial position of the organization, the possible profit (loss). Related parties have the right to enter into transactions that unrelated parties cannot. If the parties are related, then information about their relationship must be disclosed in the financial statements, even if there were no transactions between them. The reporting reflects the following information:

1) the amount of transactions carried out;

2) the amount of outstanding balances of mutual settlements;

3) information about received or provided guarantees;

4) reserves for doubtful debts related to the amount of outstanding balances;

5) expenses due from a related party in respect of doubtful debts.

For a subsidiary, parent, associate and other related parties, this information is disclosed separately. The presence of positive or negative information about related parties may affect the assessment of the activities of the organization by users of financial statements, the assessment of the risks arising from any relationship with an organization that is a related party.

IAS 26 ACCOUNTING AND REPORTING FOR PENSION PLANS (PENSION PLANS)

IFRS No. 26 "Accounting and reporting for pension plans (pension plans)" used for reporting pension plans.

pension plan - these are agreements under which the company provides pensions to its employees at the end of or after the end of service, while pensions can be calculated even before retirement.

Types of pension plans:

1) with defined contributions;

2) with defined benefits.

IFRS 26 Accounting and Reporting for Retirement Plans (Pension Plans) applies and to pension plans supported by non-employer sponsors. Pension plans are based on formal contracts, some are informal. There are pension plans that allow employers to limit their obligations under these plans. It is impossible for such employers to cancel the pension plan if they want to keep employees.

Pension Plan Investments are accounted for at fair value. For marketable securities, their market value is taken as fair value. Securities that have a fixed value may be carried at an amount that is based on their ultimate redemption value, assuming a constant yield to maturity. If it is not possible to obtain the fair value of the pension plan investment in the financial statements, the reasons why the fair value is not used should be disclosed.

Pension plan reporting must disclose the following information: reporting changes in the net assets of the pension plan; employer contributions; employee contributions; investment (interest, dividends) income; other income; pensions; income taxes; administrative and other expenses; P & L; reporting on net assets; classification of assets at the end of the reporting period; asset valuation methods; information about the investment in the employer; a statement of the elements of accounting policies; a description of the plan and the results of changes to the plan during the reporting period.

Pension plan reporting must contain a description of the plan which should include the following information:

1) the name of the employers and groups of employees covered by the plan;

2) the number of participants who will receive pensions;

3) type of plan (defined contribution or benefit);

4) description of pensions;

5) a description of the conditions for terminating the plan;

6) an explanation of whether contributions are made by plan participants;

7) changes in plan termination conditions during the reporting period.

TYPES OF PENSION PLANS

pension plan - agreements under which the company provides pensions to its employees at the end of or after the end of service, while pensions are calculated even before retirement. Types of pension plans: defined contribution; with fixed payments.

Defined Contribution Pension Plan - a pension plan, according to which the amount of pensions payable is determined on the basis of contributions to the pension fund.

The purpose of reporting a defined contribution plan is to providing information on the plan and results of investment activities.

Such reporting must disclose: description of activities for the period; description of the investment policy; results of investment activity for the period; the financial position of the plan at the end of the period.

Defined Benefit Pension Plan - a pension plan under which the amounts of pensions payable are determined by a formula based on the employee's remuneration or length of service.

Purpose of Reporting a Defined Benefit Plan - providing information on financial resources.

The reporting of a defined benefit plan must include:

1) net asset reporting: a note that identifies the actuarial present value of pensions; link to this information;

2) a report that contains: net assets; the actuarial discounted value of pensions, as well as the division of pensions into guaranteed and non-guaranteed; total excess or deficit.

Actuarial present value - the present value of pension plan payments due to employees who have retired, as well as to current employees.

Actuarial present value depends on the length of service and is calculated based on the current level of wages or on the forecast level.

Reasons for preferring the method based on the current level of wages:

1) the amount of actuarial present value is closely related to the amount payable upon termination of the plan;

2) the actuarial present value can be calculated more accurately than the salary forecast.

Reasons for preferring a method based on projected wage levels:

1) financial information must be prepared on the basis of the continuity principle;

2) non-inclusion of projected salaries may lead to the reporting of an excess of funding.

GENERAL PROVISIONS IAS 27 CONSOLIDATED FINANCIAL STATEMENTS

AND ACCOUNTING FOR INVESTMENTS IN SUBSIDIARY COMPANIES"

According to IFRS No. 27, consolidated financial statements must be prepared by companies (parent companies) that control the activities of other companies (subsidiaries). The standard is also applied when accounting for investments in subsidiaries, jointly controlled entities and associates in cases where the entity presents separate financial statements.

Consolidated financial statements - Group financial statements that are presented as if they were prepared by a single entity.

Parent organization - An organization that has one or more subsidiaries.

Subsidiary organization - an organization controlled by another (parent) organization.

The process of generating consolidated reporting - line-by-line addition of the data of financial statements of companies included in the group, with the simultaneous exclusion of intra-group transactions from the totals.

options preparation of consolidated financial statements:

1) IFRS statements are prepared for each group company. Then the data of these statements are summarized and adjusted to obtain consolidated statements;

2) indicators of Russian reporting of all companies are added up. Then the aggregated Russian financial statements of the group are transformed in accordance with IFRS and adjusted for the purposes of consolidation.

Consolidation - addition of the reporting lines of the group companies and making adjustments necessary for the compilation of consolidated financial statements.

Stages of preparation of consolidated financial statements:

1) collection and analysis of information from subsidiaries;

2) exclusion of intra-group transactions and balances;

3) calculation of the main amendments;

4) calculation of inflation adjustments;

5) collection and analysis of all amendments and preliminary version;

6) preparation of information for disclosure;

7) release of reports with explanations.

In the consolidated financial statements it is necessary to disclose: the fact of consolidation of the organization; the nature of the relationship between the subsidiary and parent organizations; date of preparation of the financial statements of the subsidiary, if these statements are required in the preparation of the consolidated financial statements and are prepared on a date that does not coincide with the reporting date of the parent organization.

When separate financial statements are prepared by a parent entity that has an interest in a jointly controlled entity, the statement must disclose the fact that the statements are separate financial statements.

PROCEDURE FOR PROVISION OF CONSOLIDATED FINANCIAL STATEMENTS

According to IFRS No. 27 "Consolidated Financial Statements and Accounting for Investments in Subsidiaries" each parent entity must present consolidated financial statements. This statement consolidates all investments in subsidiaries.

Subject to following conditions a parent entity is not required to present consolidated financial statements:

1) the parent organization is a subsidiary, is fully or partially owned by another organization. The owners of the parent organization, as well as those organizations for which this is a subsidiary, should be informed that this organization will not present consolidated financial statements;

2) debt and equity instruments of the parent organization are not traded on the open market;

3) the parent organization does not prepare documents for issuing debt or equity instruments on the open market;

4) the ultimate parent organization of this parent organization presents consolidated financial statements prepared in accordance with the requirements of IFRS.

Investments in jointly controlled entities and associates that are included in the consolidated financial statements must also be included in the separate financial statements of the investor. Distinguish 2 methods of accounting for investments in associates:

1) proportional distribution method;

2) cost method.

The main methods for preparing consolidated financial statements:

1) reflecting the indicators of assets and liabilities of the balance sheets of subsidiaries and parent organizations in the total amount;

2) reflection in the consolidated financial statements of investment activities as a whole for the group;

3) profits and losses in the consolidated financial statements are shown in expanded form in the context of each member of the group;

4) information on performance indicators is reflected in the consolidated financial statements starting from the moment of consolidation;

5) in the presence of organizations with different types of activities, consolidated statements are prepared separately for types of activities.

Difficulties in preparing consolidated financial statements:

1) the complexity of collecting complete information necessary for the timely preparation of consolidated financial statements;

2) adjustment of the reporting of subsidiaries in connection with the application of a single accounting policy;

3) the need to amend the reporting of subsidiaries;

4) the choice of the consolidation method from the whole variety of methods, taking into account the characteristics of each specific organization.

CONSOLIDATION PROCEDURE

When preparing consolidated financial statements, an entity must consolidate the financial statements of the parent and subsidiaries line by line by adding similar items of assets, liabilities, income and expenses.

Consolidated financial statements must present complete and accurate information about a group of entities as a single economic entity. To do this, it is important to determine the minority share in the profit or loss of the consolidated subsidiaries for the reporting period. The financial statements of the parent and subsidiaries used in the preparation of the consolidated financial statements must be prepared as of the same reporting date. If the reporting dates do not match, then the subsidiary should prepare additional financial statements on the same date as the parent organization.

Consolidation Methods :

1) full consolidation. There is a consolidation of all net assets of subsidiaries, minority rights are shown in the liability of the consolidated balance sheet. It is applied to subsidiaries formed by one of the methods:

- acquisition method;

- merge method;

2) proportional consolidation. Assets owned by a joint venturer are consolidated, minority interest is not reflected in the financial statements. They are used in the formation of reporting for joint activities;

3) method of equity participation. Applies to associated companies.

Consolidation stages:

1) elimination of intragroup transactions;

2) calculation of goodwill;

3) calculation of accumulated capital;

4) determination of the minority share;

5) formation of a consolidated report.

For similar transactions and events, consolidated reporting is created on the basis of a single accounting policy. Minority interests in the net assets of consolidated subsidiaries should be presented separately from equity of shareholders of the parent. Minority share in net assets includes :

1) the amounts of minority shares as of the date of merger;

2) minority interest in changes in equity since the date of merger.

Minority interests are presented in the consolidated balance sheet in equity separately from parent equity. It is also mandatory that the minority's share of the group's profit or loss be separately recognized. Losses attributable to a minority interest in a consolidated subsidiary may exceed the minority interest in its equity. These losses should be shared by the majority. Exception: a subsidiary can independently cover these losses.

APPLICATION OF CONSOLIDATED FINANCIAL STATEMENTS

Under IAS 27, Consolidated Financial Statements and Accounting for Investments in Subsidiaries, a parent may exercise control over a subsidiary in the following cases :

1) the parent organization owns more than half of the voting rights of the subsidiary;

2) the parent organization does not own half of the voting rights, but has the ability to manage shares by agreement of the parties, determine the policy of the organization, and take part in the appointment of employees to senior positions.

The parent organization loses control over the subsidiary if it does not have the ability to determine the policy of the organization. Causes : terms of the contract, change in the level of ownership due to the transition under the control of the state, etc.

To form consolidated financial statements, the organization must incur certain costs. These costs should be recouped through the effective use of the reports received (for compiling segment reporting, planning any changes, etc.). A subsidiary may be excluded from consolidation. Cause - the attested fact that the control of the parent organization over the subsidiary is temporary. The temporary nature of control is explained by the fact that the parent organization acquires a subsidiary for subsequent sale within 12 months and is currently looking for buyers. If within a given period of time a subsidiary is not sold, then it must be included in the consolidation from the moment of acquisition. If the sale transaction has not been completed, but the process of its execution is underway, then the reporting does not need to be revised, since the organization is excluded from consolidation. At the same time, the financial statements for all periods should be revised. Exclusion from consolidation in such situations may lead to a distortion of the information received and a violation of the requirements for reporting.

In the process of applying consolidated reporting, an organization must solve an important task - full and rational use of information obtained in the process of consolidation. Distinctive features of the consolidated financial statements:

1) reporting is compiled by a group of organizations;

2) all organizations that are part of the group belong to the same owner;

3) reporting characterizes the financial condition and performance of the entire group as a whole, and not separately for each enterprise.

OBJECTIVES IFRS 28 ACCOUNTING FOR INVESTMENTS IN ASSOCIATES

IFRS No. 28 used to account for investments in associates. This Standard does not apply to investments in associates made by risk capital entities; mutual funds, mutual funds, which, after initial recognition, are measured at fair value through profit or loss or are classified as held for trading.

Associated Organization - an organization over which the investor has significant influence and which is not a subsidiary.

Subsidiary organization - an organization that is controlled by another organization (parent).

An investment in an associate is accounted for using the equity method, except the following cases:

1) if the investment is acquired and held for sale before the expiration of 12 months from the date of acquisition, and the organization is looking for buyers;

2) the investor is a subsidiary that is fully or partially owned by another organization, and its owners do not object to the investor not applying the equity method of accounting;

3) debt and equity instruments of the investor are not traded on the open market;

4) if the investor's intermediate parent company issues consolidated financial statements to the public.

If the investment in an associate is not disposed of within 12 months, it is accounted for using the equity method from the date of acquisition. The financial statements for periods since acquisition need to be revised.

An investment in an associate must be accounted for in the investor's separate financial statements that disclose:

1) generalized financial information of associated organizations, which includes the amounts of assets, liabilities, income, profits and losses;

2) the fair value of investments in associates for which public price quotations are available;

3) the date of preparation of the financial statements, when such statements are used using the equity method of accounting and are prepared on a date that differs from the reporting date of the investor;

4) the reasons for the difference in reporting date or period;

5) the nature and degree of restriction on the transfer of funds to the investor;

6) the fact that an associate is not accounted for under the equity method;

7) an unrecognized share of the loss, if the investor has ceased recognizing its share of the associate's loss.

IFRS No. 29 FINANCIAL REPORTING IN HYPERINFLATION

Purpose of IFRS No. 29 "Financial reporting in hyperinflationary conditions" - determination of the procedure for recalculation of financial statements in conditions of hyperinflation.

The standard is applied to the preparation of primary financial statements in the currency of a country with a hyperinflationary economy.

Criteria , allowing to call the economy hyperinflationary:

1) most of the population prefers to keep savings in non-monetary form, or relatively stable currency;

2) prices are most often indicated in foreign currency;

3) sales and purchases on credit are carried out at prices that compensate for the expected loss of purchasing power of money during the term of the loan, even if it is short;

4) prices, wages, discount rates are determined based on the price index;

5) the cumulative rise in inflation in recent years is approaching 100% or more.

The effect of inflation is expressed in the fall in the purchasing power of money and cash equivalents, which leads to a profit or loss on the net cash position.

Net cash position - the positive or negative difference between monetary assets and liabilities of the company.

The financial statements of an entity that reports in the currency of a hyperinflationary country must be restated in the units of measure in effect at the reporting date. The restated financial statements replace the regular financial statements.

Ways to account for the impact of inflation :

1) direct (determines the effect of inflation in the recalculation of financial statements based on the actual acquisition cost);

2) indirect (recalculation of financial statements is based on the replacement cost).

Inflation has a different impact on reporting items. Profit (loss) on net monetary items should be included in net income and disclosed separately. If the economy ceases to be hyperinflationary, the entity does not apply this standard for reporting. When presenting financial statements, the amounts expressed in units of measure valid at the end of the previous reporting period are used as the basis for the carrying amounts in subsequent financial statements.

Information disclosed in the reporting:

1) the fact that the financial statements for the previous period have been restated to take into account changes in the general purchasing power of the reporting currency and are presented in units of measurement valid at the reporting date;

2) the level of the price index as of the reporting date;

3) changes in the price index for the current and previous reporting periods;

4) method of preparation of financial statements.

FINANCIAL STATEMENTS PREPARED ON THE BASIS OF ACTUAL VALUE

When restating financial statements prepared on an acquisition cost basis, there are the following: regulations :

1) comparable positions are recalculated in units of measurement in force on the reporting date;

2) a reliable general price index reflecting changes in purchasing power should be used. If this is not possible, a relatively stable foreign currency is used;

3) the recalculation starts from the beginning of the financial period when hyperinflation was revealed;

4) when hyperinflation stops, recalculation should be stopped.

Features of the balance sheet :

1) balance sheet amounts not expressed in units of measurement at the reporting date must be adjusted using a general price index;

2) monetary items are not subject to recalculation;

3) assets and liabilities associated under the contract with price changes are subject to recalculation in accordance with the contract;

4) non-monetary assets are not subject to recalculation if they are indicated at the reporting date in the amount of possible net realizable value at fair value or in the amount of recoverable amount;

5) at the beginning of the first period of application of IAS 29, components of equity, other than retained earnings, are subject to restatement starting from the moment those components are paid;

6) a part of non-monetary assets is accounted for at actual cost. These assets are carried at the amounts effective at the date of their acquisition;

7) the value of inventories of partially finished and finished products is reviewed from the date of occurrence of the costs of purchase and processing;

8) the revised amount of a non-monetary item must be reduced if it exceeds the amount that will be recovered from the future use of the asset;

9) reporting of the invested company may be made in the currency of the country, the economy of which is hyperinflationary. The standard will allow to calculate the investor's share in net assets and results of operations;

10) if the date of acquisition of the property, plant and equipment is not specified, independent professional judgment may be required to value items in the first periods of application of the standard as the basis for restatement.

Features of drawing up a Profit and Loss Statement :

1) all items in the Profit and Loss Statement must be expressed in units of measurement valid on the reporting date. The amounts are recalculated by applying an adjusted general price index to them from the date the item of income or expense is initially recorded;

2) profit (loss) on net monetary items is included in net profit.

FINANCIAL STATEMENTS PREPARED ON THE BASIS OF CURRENT COSTS

Accounting for the impact of inflation is carried out in two ways:

1) direct (determines the effect of inflation in the recalculation of financial statements based on the actual acquisition cost);

2) indirect (financial statements are recalculated on the basis of replacement cost).

In the balance sheet, all items shown at replacement cost are not subject to adjustment, since they are expressed in units of measurement. All other items are restated in accordance with the requirements of IAS 29.

When compiling the Profit and Loss Statement at replacement cost reflects costs that are valid at the time of transactions or events. Cost of goods sold and depreciation must be accounted for at current costs at the time of implementation. Sales, other expenses are reflected in monetary terms at the time of occurrence.

The peculiarity of applying the method of recalculating statements based on replacement cost - all amounts must be converted into units of measurement valid at the reporting date using a general price index.

Revision of financial statements in accordance with the requirements of IFRS No. 29 may lead to discrepancies between taxable profit and accounting profit.

The issue of adjusting reporting in conditions of hyperinflation requires understanding the concepts of capital and income. It is important to bear in mind that adjusted reporting is in addition to, but does not replace, regular reporting based on traditional methods. Based on the adjusted reporting, tax payments should not be recalculated.

This reporting is used to make timely and appropriate management decisions that allow the distribution of profits.

Features of reporting according to international standards - assessment of reporting items at fair value. But in Russian practice, the concept of "fair value" is not yet used. Fair value is the amount of cash that is sufficient to acquire an asset or settle a liability in a transaction between parties who are knowledgeable, independent of each other and willing to enter into such a transaction.

In reporting, the organization discloses information about the chosen reporting method (at actual cost, at replacement cost), the fact that the reporting and relevant indicators for previous periods are recalculated and presented in units of measurement valid at the reporting date, the price index and its changes in the reporting period.

IFRS No. 30 "DISCLOSURES IN THE FINANCIAL STATEMENTS OF BANKS

AND SIMILAR FINANCIAL INSTITUTIONS"

IFRS No. 30 used for the financial statements of banks and similar financial institutions. With the help of the presented reporting, users should assess the financial position of the bank, as well as the results of its activities. Banks use different methods for evaluating items in their financial statements. In accordance with the requirements of the standard, banks are required to disclose in their financial statements their accounting policies regarding:

1) recognition of the main types of income;

2) methods for determining losses on loans and advances;

3) methods for writing off losses on loans and advances;

4) evaluation of investment and commercial securities;

5) methods of accrual of banking risks.

The income statement must disclose the following information:

1) income in the form of dividends;

2) interest expenses;

3) commissions;

4) expenses for the payment of commissions;

5) operating expenses;

6) administrative expenses;

7) losses on loans;

8) profit minus losses from foreign exchange transactions; 9) profit minus losses on investment and commercial papers.

The main types of income of the bank include: interest; fees for services rendered; commission fees.

The main types of expenses of the bank include: interest; expenses associated with a decrease in the carrying value of investments; Commission; losses on loans and advances; Administrative expenses.

A balance sheet prepared in accordance with IFRS No. 30 must disclose the following information:

1) assets: cash; bills accepted for rediscounting at the central bank; funds placed in other banks; loans and advances to customers; loans and advances to other banks; investment securities;

2) liabilities: deposits of other banks; amounts owed to other depositors; deposit certificates; promissory notes.

The grouping of assets and liabilities according to the nature of their origin and location of their liquidity is the most convenient. Short-term and long-term items are not disclosed separately. In its financial statements, a bank must disclose the fair value of each class of its financial assets and liabilities. The bank must detail the analysis of assets and liabilities in accordance with the maturity. The maturity date is determined based on the period of time until their maturity date.

The bank should detail the analysis of assets and liabilities, grouping according to maturity.

Maturities of assets and liabilities: up to 1 month; from 1 to 3 months; from 3 months to 1 year; from 1 year to 5 years; from 5 years and more.

SCOPE OF IFRS No. 31, FINANCIAL STATEMENTS OF PARTICIPATION

IN JOINT ACTIVITIES"

IFRS No. 31 is used to account for participation interests in joint activities and reporting on assets, liabilities, income and expenses of a joint organization in the financial statements of entrepreneurs and investors, regardless of the forms and structures in which joint activities are carried out.

This standard cannot be applied to the participation shares of entrepreneurs in jointly controlled entities that are owned by: entities that have risk capital; mutual funds; mutual investment funds, including investment insurance funds.

Forms of joint activity:

1) jointly controlled operations;

2) jointly controlled assets;

3) jointly controlled entities.

Characteristics of joint activities:

1) joint control;

2) contractual agreement.

Joint control is removed if the investee is in the process of legal reorganization or bankruptcy.

A contractual agreement is drawn up in writing. It should reflect the following questions:

1) contribution of entrepreneurs to capital;

2) appointment of a board of directors or a joint venture management body;

3) the right to vote of entrepreneurs has been determined;

4) the nature and duration of the activity;

5) financial reporting obligations.

The contractual agreement guarantees that none of the entrepreneurs of the joint activity will be able to establish sole control over the entrepreneurial activity. The contractual agreement may specify the manager or manager of the joint activity, but he does not have the right to fully control the activity. The manager, acting on the basis of a contractual agreement, can only act within the framework of the operating and financial policies that are agreed upon by the entrepreneurs in the course of joint activities. If the elected manager controls the financial and operational policies, then this activity becomes its subsidiary, and not a joint activity.

Control is the ability to govern the financial and operating policies of an organization so as to benefit from its activities.

Joint control - this is an agreement on the distribution of control over economic activity under an agreement.

In relation to its ownership interest, each entrepreneur must recognize: the assets and liabilities that it controls; expenses and his share of the income that he should receive as a result of the sale of goods or the provision of services.

THE CONCEPT OF JOINTLY CONTROLLED ASSETS

A joint venture involves joint ownership by entrepreneurs of assets that are intended to achieve the objectives of the joint venture. Each entrepreneur participating in a joint activity receives his share of the production, and also bears his share of the costs. Such joint activities do not require the formation of companies. Many companies use jointly controlled assets in their activities. An example of this type of company can be the joint operation of an oil pipeline by several oil companies.

This Standard requires an entity to recognize the following information in its financial statements for its interest in jointly controlled assets:

1) the share of jointly controlled assets should be classified according to the nature of these assets;

2) obligations assumed by the entrepreneur;

3) the share of obligations in relation to joint activities;

4) the share of income and expenses.

In accordance with IAS 31 Financial Statements of Interests in Joint Ventures

the operation of some joint ventures involves the use of the assets and resources of the entrepreneurs, rather than the establishment of any financial structure separate from the entrepreneurs themselves.

Each entrepreneur uses his own fixed assets and creates his own reserves, bears his own expenses and obligations. Joint activities can be carried out with the help of employees.

Jointly controlled assets and operations These are similar concepts, and there is no difference between them. The only difference is the mode of ownership of assets, which is divided into joint or sole. An important similarity between these types of joint arrangements is that the assets, liabilities, income and expenses of joint arrangements are included in the balance sheet.

Jointly Controlled Operations - this is a form of joint activity when the assets and other resources of the participants of the joint company are used without establishing any separate financial structure.

Requirements for the recognition of joint arrangements (jointly controlled assets):

1) the assets are under the control of each entrepreneur participating in the joint activity;

2) each entrepreneur must have a share in jointly controlled assets;

3) obligations assumed by the entrepreneur in relation to joint activities;

4) expenses incurred by the entrepreneur in the joint activity;

5) share of joint expenses;

6) share in the proceeds of joint activities.

PROCEDURE FOR REFLECTION OF PARTICIPATION IN JOINT ACTIVITIES IN FINANCIAL STATEMENTS

In accordance with IAS 31 Financial Statements of Interests in Joint Ventures An entrepreneur is required to present financial statements in the following ways:

1) proportional consolidation;

2) by equity participation.

The entrepreneur must recognize his interest in the joint venture using the proportional consolidation method. This alternative method is used in two reporting formats:

1) the method of accounting for equity participation;

2) separate financial statements.

Regardless of which format is used, it is unprofitable for the entrepreneur to offset any assets and liabilities, income and expenses by deducting other assets and liabilities, expenses and income.

An entity must recognize its interest in a joint venture regardless of the following factors:

1) whether he has investments in subsidiaries;

2) financial statements are presented as consolidated.

If the entity loses its influence in the jointly controlled entity, it must cease using the equity method from that date. If the entrepreneur has sold an asset or, conversely, contributed assets to a joint venture, then the recognition of profit or loss should reflect the substance of the transaction. The undertaking must stop using proportionate consolidation as soon as joint control is lost. An entity may recognize its interest in a joint venture using the equity method of accounting.

Financial statements of joint venture may not be compiled, but in this case, entrepreneurs need to prepare management accounts that will help them assess joint activities.

In the financial statements, the entrepreneur must disclose the following information:

1) contingent liabilities that have arisen in connection with its participation interests in joint activities;

2) the share of obligations for which the entrepreneur is liable to other entrepreneurs;

3) conditional obligations under which the entrepreneur is liable for other entrepreneurs participating in joint activities.

Separately from other liabilities, the entrepreneur must show the amount of the following liabilities:

1) investment obligations;

2) the share of investment obligations in joint activities.

In accordance with IFRS No. 31 Financial Statements of Interests in Joint Ventures An entity is required to disclose in its financial statements the method it uses to recognize its interests in jointly controlled entities.

IFRS No. 32 FINANCIAL INSTRUMENTS: DISCLOSURE AND PRESENTATION

The objective of IAS 32 Financial Instruments: Disclosure and Presentation of Information is the understanding by users of financial statements of the meaning of financial instruments.

Financial instrument A contract that simultaneously gives rise to a financial asset of one entity and a financial liability of another.

Financial assets include:

1) cash;

2) an equity instrument of another organization;

3) the contractual right to receive funds from another organization, to exchange financial assets and liabilities;

4) an agreement according to which the settlement is made with the organization's own equity instruments.

This Standard does not apply to the following types of financial instruments:

1) the rights and obligations of employers under the employee remuneration program;

2) stakes in subsidiaries, associates and joint activities;

3) rights and obligations under insurance contracts;

4) contracts that provide for payments related to climatic, geographical and physical variables.

This standard applies to recognized and unrecognized financial instruments (loan liabilities).

Equity instrument - an agreement that confirms the right to a residual share in the assets of the organization, remaining after deduction of all its liabilities.

fair value - the amount for which an asset can be exchanged in a transaction between well-informed and independent parties.

IFRS No. 32 Financial Instruments: Disclosure and Presentation applies to contracts for the purchase of financial assets, settlements for which are made by offsetting counterclaims in cash, by exchanging financial instruments. The exception is contracts for the supply of a non-financial asset to meet the needs of the organization.

Settlement options under contracts for the purchase of financial assets, settlements for which are made by offsetting counterclaims in cash, by exchanging financial instruments:

1) when the organization has a practice of selling the underlying asset in order to profit from price fluctuations;

2) the terms of the contract enable each party to set off counterclaims in cash or by exchanging financial instruments;

3) the absence in the contract of a direct indication of the possibility of settlement by offsetting counterclaims, but the organization has practical skills in such contracts;

4) a non-financial asset can be converted into cash.

DISCLOSURE OF INFORMATION ON FINANCIAL INSTRUMENTS

Purpose of disclosure in accordance with IFRS No. 32 Financial Instruments: Disclosure and Presentation is to provide information that will contribute to understanding the significance of financial instruments in relation to the financial position of the entity.

Transactions with financial instruments may carry financial risk. Disclosure of information about financial instruments allows users to provide this reporting.

Market risk types:

1) currency risk;

2) price risk;

3) fair value interest rate risk;

4) liquidity risk;

5) credit risk;

6) interest rate risk of cash flow.

In accordance with IFRS No. 32 Financial Instruments: Disclosure and Presentation financial instruments should be grouped into classes according to the nature of the information disclosed.

The purpose of separating financial instruments into classes is to measure at cost and amortized cost from instruments that are grouped at fair value.

An entity shall describe its financial management policies and disclose fair value hedges, cash flows and net investments in foreign operations.

Hedging - this is risk insurance against adverse price changes for any inventory items under contracts and commercial transactions that provide for the supply (sale) of goods in future periods.

The financial management policy should disclose the following information:

1) description of the hedge;

2) description of financial instruments that act as hedging instruments;

3) fair value of hedging instruments as of the balance sheet date;

4) nature of hedged risks;

5) when hedging cash flows, it is necessary to reflect the period in which cash flows are expected.

The gain or loss on the cash flow hedge instrument must be recognized in the equity account in the statement of changes in equity. The organization discloses: the amount recognized in equity in the reporting period; the amount written off from the capital accounts in the reporting period; the amount debited from equity in the current period that is included in the acquisition cost.

An entity is required to disclose information about its exposure to interest rate risk for each class of financial assets and liabilities:

1) the date of revision of the interest rate or the date of maturity, depending on which date is earlier;

2) effective interest rates.

PRESENTATION OF INFORMATION ON FINANCIAL INSTRUMENTS

The issuer of a financial instrument is required by contract to classify the instrument on initial recognition as a financial liability, financial asset or equity instrument.

Cases in which a financial instrument may be recognized as an equity instrument:

1) the contractual obligation is not part of the instrument;

2) settlements on the instrument are carried out using equity instruments of the issuer.

Signs of difference between a financial liability and an equity instrument:

1) a contractual obligation of one party to another to provide funds or financial assets;

2) exchange of financial assets and financial liabilities on unfavorable terms for the issuer.

Classification of financial liabilities in the balance sheet is made not by legal form, but by content.

If an entity has repurchased its own equity instruments , then they must be deducted from capital. If an entity sells, buys or issues its own equity instruments, no gain or loss is recognised. Such repurchased shares may be held by the entity. Any consideration paid or received is recognized in equity.

Interest, dividends, losses and gains that relate to a financial instrument must be recognized as income or expenses.

Financial asset and financial liability must be set off against each other friend, and the net amount should be presented in the balance sheet in the following cases:

1) if the entity currently has the right to offset the recognized amounts;

2) the entity settles by offsetting counterclaims or attempts to simultaneously realize the asset and settle the liability.

Refunds are not made in the following cases:

1) if several other financial instruments are used to reproduce a financial instrument;

2) financial assets and financial liabilities arise with financial instruments that bear risk with different counterparties;

3) if assets are pledged to secure financial obligations;

4) liabilities that have arisen due to events that caused losses can be compensated by a third party upon presentation of an insurance policy;

5) if the financial assets were transferred by the debtor to the trust for settlement of obligations without the creditor accepting these assets.

This standard requires the presentation of financial assets and financial liabilities on a net basis, provided that this reflects the cash flows that the entity expects from settlement of financial instruments.

BUSINESS RISK

Entrepreneurial risk - this is an activity related to overcoming uncertainty in a situation of choice, during which it is possible to assess the likelihood of achieving a result, failure and deviation from the goal.

Elements that make up the essence of risk:

1) the probability of achieving the desired result;

2) the possibility of deviation from the goal;

3) the possibility of losses associated with the implementation of the chosen alternative;

4) lack of confidence in achieving the goal.

Nature of risk:

1) objective - manifested in the choice of alternatives and the likelihood of an outcome, objectivity lies in the fact that the concept of risk reveals the phenomena, processes and aspects of activity that exist in life;

2) subjective - the existence of processes in which the objects of socio-economic life enter, lies in the fact that all people differently accept the same amount of economic risk due to different psychological, moral, ideological orientations;

3) subjective-objective - the risk is generated by processes of a subjective nature and those whose existence does not depend on the will and consciousness of a person.

Risk Characteristics:

1) mathematical expectation is the weighted average of all possible outcomes;

2) variance - deviation of actual results from expected ones;

3) correlation coefficient - the relationship between variables in the change in the average value of one of them, depending on changes in the other;

4) coefficient of variation - the share of the average value of a random variable.

Risk functions:

1) stimulating - manifests itself in two aspects: a constructive aspect, consisting in the study of risk sources in the design of operations and systems, the design of operations, forms of transactions that exclude or reduce the consequences of risk as a negative deviation; destructive aspect, consisting in the implementation of decisions with unreasonable risk, which leads to the implementation of operations related to adventurous;

2) risk protection function has two aspects: the historical and genetic aspect is that it is necessary to look for means of protection against the undesirable realization of the risk; the social and legal aspect is the need for legal regulation of insurance activities;

3) compensatory - additional profit in comparison with the planned profit is provided with a favorable outcome;

4) socioeconomic - in the process of market activity, risk singles out social groups of owners in social classes, and in the economy - branches of activity.

GENERAL PROVISIONS IAS 33 EARNINGS PER SHARE

Objective of IAS 33 Earnings per Share is to establish principles and present earnings per share. This allows you to compare the results of activities of different organizations in the same reporting period and one organization in different reporting periods. This Standard requires an entity to disclose earnings per share and the amount of that earnings.

Promotion - this is a security that confirms the contribution by its owner of a share in the authorized capital of a joint-stock company, giving the right to receive income from activities, distribute the balance of property upon liquidation of the company, to participate in the activities of this company.

Depending on the way the person is designated, the shares differ:

1) nominal;

2) bearer.

In registered shares the name of the owner is indicated. They are recorded in the register book of the joint-stock company. Ordinary shares give the right to participate in the management of the organization and receive dividends. Preference shares do not give the right to participate in the management of a joint-stock company, but their owners have the right to receive dividends in a fixed fixed amount, regardless of how much profit the company has received. An entity must present in the income statement basic and diluted earnings per share for operating profit or loss. An entity is required to report basic and diluted earnings per share with the same accuracy for each period for which the income statement is prepared.

An entity that presents information about a discontinued operation may disclose the amounts of basic and diluted earnings in the notes to the financial statements.

An entity shall disclose the following information:

1) a description of transactions that occurred after the reporting date with ordinary and potentially ordinary shares, which led to a change in the number of these shares as of the end of the reporting period;

2) instruments with a future dilutive effect on earnings per share that are not included in the calculation of dilutive earnings;

3) the weighted average number of ordinary shares used in the calculation of basic and diluted earnings.

ordinary share - an equity instrument that has a lower status in relation to others.

Potentially common share - a financial instrument that gives the owner the right to own ordinary shares.

If an organization submits separate and consolidated financial statements, then disclosure is made on the basis of the consolidated financial statements.

CONCEPT OF BASIC AND DILUTIVE EARNINGS PER SHARE

Basic earnings per share is the amount of net income for the period attributable to ordinary shareholders divided by the weighted average number of ordinary shares outstanding during the period.

An entity shall calculate basic earnings per share in relation to profit or loss. Information about basic earnings per share is provided to determine the share of participation of each ordinary share in the activities of the organization.

To calculate basic earnings per share the total number of ordinary shares must be equal to the number of ordinary shares outstanding during the period.

All recognized expenses and income of ordinary shareholders during the period should be included in tax expenses and dividends.

After tax, the amount of dividends consists of:

1) the amount of dividends (net of tax) on non-cumulative preferred shares declared for the current period;

2) the amount of dividends (net of tax) on cumulative preferred shares that must be paid for the period, regardless of whether dividends have been declared or not.

Diluted earnings per share is the amount of net income for the period attributable to ordinary shareholders divided by the weighted average number of ordinary shares outstanding and adjusted for the dilutive effect of all convertible contracts into ordinary shares.

An entity calculates diluted earnings per share by adjusting the profit or loss attributable to equity holders.

Purpose of calculating diluted earnings - identification of the participation share of each ordinary share in the results of the company's activities.

To calculate diluted earnings per share, an entity must adjust for profit or loss attributable to ordinary shareholders. This profit and loss is included in tax expense and dividends.

After tax, the amount of dividends consists of:

1) interest accruing on potentially dilutive ordinary shares;

2) dividends that relate to potentially dilutive ordinary shares;

3) changes in income or expense resulting from the dilutive conversion of potential ordinary shares.

To calculate diluted earnings per share, the number of ordinary shares must be equal to the weighted average number of ordinary shares that would be issued when all potential dilutive ordinary shares are converted into ordinary shares.

OBJECTIVES OF IFRS 34 INTERIM FINANCIAL REPORTING

IFRS No. 34 Interim Financial Reporting applies to all entities that, either by law or by choice, publish financial statements for less than a full financial year. This Standard does not prescribe which entities are required to publish interim financial statements. When disclosing information, it is necessary to take into account its materiality. Income received irregularly (dividends, government subsidies) is not shown in the preparation of interim financial statements, unless it is specifically justified. Costs incurred unevenly during the year should only be shown in the interim financial statements if otherwise specified.

Interim Financial Statements are financial statements that contain a complete or condensed set of financial statements for a period shorter than a financial year.

This standard defines the minimum content of reporting and specifies the principles of accounting recognition and measurement. Information that an entity must include in a note to its interim financial statements:

1) the procedure for applying accounting policies;

2) explanations about the seasonality and cyclicality of operations;

3) the nature and amount of positions affecting assets, liabilities, equity, net income, cash flows that are unusual due to their nature, size or origin;

4) events that occurred after the reporting date;

5) paid dividends;

6) information about the purchase or sale of subsidiaries, long-term investments, restructuring and termination of activities;

7) changes in contingent liabilities or contingent assets;

8) changes in equity or debt securities, including facts of outstanding obligations, violations of debt agreements;

9) revenue and results by industry and geographic segments;

10) confirmation that the interim financial statements are prepared in accordance with IFRS.

When estimates change during the final interim period of the financial year, the nature and amount of the change must be disclosed in the notes to the annual financial statements.

Interim period A reporting period is shorter than a full financial year. The interim financial statements are based on relatively subjective rules and estimates. The information presented in the financial statements must comply with the qualitative characteristics: 1) understandability; 2) relevance; 3) reliability; 4) comparability.

FORMS, COMPOSITION AND CONTENT OF INTERIM FINANCIAL STATEMENTS

Interim financial statements include: compressed balance sheet; condensed income statement; condensed cash flow statement; condensed statement of changes in equity; selective explanatory notes.

Requirements for the form and content of interim financial statements:

1) each subtotal includes the latest financial statements;

2) earnings per share must be presented in the income statement;

3) the parent company must prepare consolidated financial statements.

If a company publishes a set of condensed financial statements as interim financial statements, these statements must include the subtotals that were included in the most recent annual financial statements. An entity shall include additional line items and a note in interim reporting if it is likely that users of the financial statements will be misled. A full or condensed income statement for an interim period must include basic or diluted earnings per share. If the company's last statement was a consolidated statement, then the interim financial statements must be left on a consolidated basis.

Interim financial statements must disclose the following information:

1) acquisition and disposal of fixed assets;

2) transactions with related parties;

3) non-repayment of debt and violation of debt obligations and their correction;

4) write-off of inventories to the sale price for restoration;

5) settlement of litigation;

6) recovery of any provisions for restructuring costs;

7) recognition of loss from depreciation of fixed assets;

8) obligations upon purchase of fixed assets;

9) write-off of loss from depreciation of fixed assets and intangible assets.

Interim financial statements must contain the following financial statements for the periods:

1) the balance sheet as of the end of the interim period and the comparative balance sheet as of the end of the previous financial year;

2) profit and loss statements for the current interim period and cumulative total for the current financial year in comparison with reports for the interim periods of the previous financial year;

3) a statement of changes in capital on an accrual basis for the current financial year in comparison with the report for the same period of the previous financial year;

4) cash flow statement for the current financial year in comparison with the report for the comparable period of the previous financial year.

RECOGNITION AND EVALUATION OF INTERIM FINANCIAL STATEMENTS

Accounting policies in interim financial statements and in the annual financial statements should be the same. The exception is changes that were made after the date of preparation of annual reports. The frequency of reporting does not affect the assessment of annual results. To achieve this objective, interim financial reporting needs to be measured on the basis of the year-to-date period.

The frequency of presentation of an entity's financial statements should not affect the assessment of annual results, as the interim period is only part of the financial year. Estimates for the period from the beginning of the year to the date of reporting may have an impact on the change in the amounts that are presented in previous interim periods of the current financial year.

An important characteristic of income and expenses is the receipt and disposal of assets. If these receipts and disposals have occurred, then it is necessary to recognize these revenues and expenses. Otherwise, they are not recognized.

When evaluating liabilities, assets, income, expenses and cash flows the company takes into account the information throughout the financial year. The assessment is based on the period from the beginning of the year to the reporting date. If a company reports more than once every six months, it must determine income and expenses based on the period from the beginning of the year to the reporting date of each interim period. The amounts of income and expenses that are presented in the current interim period will reflect changes in estimates of the amounts that were presented in previous interim financial statements. Amounts that were recorded in the previous interim period cannot be adjusted.

Revenue generated by chance during the financial year shall not be carried forward to the date of the interim financial statements. These types of revenue include dividend income, royalties and government subsidies. Some organizations receive more revenue at certain intervals, and at other intervals much less. Such revenue must be recognized when it is received.

Costs that arise unevenly during the financial year are recognized or carried forward if that type of cost can be forecasted or carried forward to the end of the financial year.

Valuation procedures in preparing financial statements should ensure that the information obtained is reliable and material.

SCOPE OF IFRS 36 IMPAIRMENT OF ASSETS

Objective of IAS 36 Impairment of Assets - establishing procedures for accounting for assets in terms of a value that does not exceed their recoverable amount. The standard requires an entity to regularly review the condition of its assets for possible impairment. The standard applies to most assets and investments in subsidiaries, associates and joint ventures. An estimate of the recoverable amount of an asset should be made if there is any indication at the reporting date that the asset may be impaired.

The organization should keep records of external and internal signs. External signs include a decline in the market value of assets, significant changes in the company's activities, and internal signs include the obsolescence of an asset, a decrease in the technological indicators of an asset, etc.

IFRS 36 does not apply to the following assets:

1) stocks;

2) assets that have arisen under a construction contract;

3) deferred tax assets;

4) assets that have arisen from employee benefits;

5) biological assets;

6) intangible assets that have arisen from the contractual rights of insurers.

The recoverable amount of an asset is determined by the higher of the asset's net selling price and value in use.

net selling price is the amount that is received from the sale of an asset in a transaction between knowledgeable, independent parties. The amount of the transaction must be adjusted for the costs associated with the sale of the asset.

Cost per use is the present value of the estimated future flows that are expected to result from the continued use of the asset and its disposal at the end of its useful life. IFRS No. 36 establishes the procedure for determining the carrying amount of a cash-generating unit, the procedure for determining the impairment loss on the assets of this unit.

Book value is the amount at which an asset is carried after deducting any accumulated depreciation and any accumulated impairment loss.

Impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. If the carrying amount of an asset exceeds its recoverable amount, then this means that an impairment loss has occurred on the asset. The recoverable amount must be separately estimated for each asset. If this is not possible, then the company must refund the cash-generating unit amount.

Cash-generating unit for an asset is the smallest group of assets that includes the asset and generates cash inflows from the continued use of the asset.

DISCLOSURE OF INFORMATION ON THE IMPAIRMENT OF ASSETS

For each class of asset, an entity shall disclose the following information:

1) the amount of impairment losses, which is reflected in the income statement during the period;

2) the reversal of the impairment recognized in the income statement during the period;

3) the amount of impairment losses on revalued assets recorded in the equity account during the period;

4) the reversed amount of impairment losses on revalued assets recorded in the equity account during the period.

Asset class - a group of assets that have similar properties in nature and use in the activities of the organization.

An entity shall disclose information about each material impairment loss:

1) the events that led to the recognition or reversal of the impairment loss;

2) the amount of the impairment loss that has been recognized or reversed;

3) the nature of the asset;

4) the name of the cash-generating unit.

The financial statements should disclose the assumptions that are used in determining the recoverable amount of assets (cash-generating units) during the period. An entity shall disclose the estimates used to determine the recoverable amount of a cash-generating unit when goodwill or an intangible asset with an indefinite useful life is included in that unit's carrying amount. If none of the goodwill that was acquired in a business combination during the period was allocated to a cash-generating unit, the amount of retained goodwill must be disclosed together with the reasons for the non-allocation of this amount.

If there are signs of possible depreciation goodwill and corporate assets, recoverable amounts are determined for the cash-generating unit to which these assets belong.

Impairment loss that is recognized in prior years need to be reduced if there has been a change in the estimates of the recoverable amount at the time the most recent impairment loss was recognised. The amount of the loss is reduced only to a level that does not cause its carrying amount to exceed the carrying amount that would have been determined if no impairment loss had been recognized for the asset in prior years.

A decrease in impairment loss should be recognized as income on assets carried at cost and treated as a revaluation increase on assets carried at revalued amounts.

IAS 37 RESERVES, CONTINGENCIES AND CONTINGENT ASSETS

Purpose of IFRS No. 37 is to establish accounting and disclosure rules for all estimated liabilities, contingent liabilities and contingent assets.

This standard does not apply:

1) results of financial instruments that are measured at fair value;

2) to the results of contracts to be performed, except for onerous contracts;

3) to estimated liabilities, contingent liabilities and contingent assets arising from contracts with the insured;

4) are considered by another international financial reporting standard.

In accordance with IFRS No. 37, the following transactions are prohibited:

1) unreasonably write off large sums of money for expenses;

2) create reserves that are not related to the existence of debt on some obligation;

3) carry out the regulation of profit indicators with the help of reserves.

In order to make it easier for users to understand the information and provide them with a more accurate and reliable picture, it is necessary to disclose information about reserves in detail.

Reserve signs:

1) the presence of a current obligation as a result of past events;

2) the probability of outflow of resources;

3) the possibility of estimating the time and amount of the obligation.

The absence of one or more of the signs indicates the presence of a contingent liability.

Contracts to be performed - these are contracts under which neither party has fulfilled its obligations or both parties have fulfilled their obligations partially equally.

IAS 37 Provisions, Contingent Liabilities and Contingent Assets defines estimated liabilities with uncertain time and amount.

Estimated liability is an obligation of uncertain value or with an indefinite period of fulfillment.

Contingent liabilities - These are potential liabilities that can become real if a certain event occurs.

For each class of provision, an entity shall disclose the following information:

1) balance sheet at the beginning and end of the period;

2) additional estimated liabilities that were created during the period;

3) canceled amounts during the period;

4) used amounts for the period - amounts that have been accrued against estimated liabilities;

5) increase in discounted amounts during the period;

6) a description of the nature of the obligation;

7) time of disposal of economic benefits;

8) the amount of expected reimbursements.

To classify contingent and contingent liabilities into classes, an entity must consider whether their nature is similar.

THE CONCEPT OF "ESTIMATED LIABILITIES"

Estimated liability - this is an obligation for which there is no size and term of execution.

Estimated liabilities are recognized in the following cases:

1) the organization has a legal or imputed obligation;

2) there was a need for an outflow of resources;

3) the amount of the obligation can be estimated.

In almost all cases, it can be determined whether a given event gave rise to a liability. Taking all evidence into account, an entity determines whether a liability exists at the reporting date. Based on this evidence, it can be concluded that:

1) if a liability exists at the reporting date, the entity recognizes a provision;

2) if no liability exists at the reporting date, the entity recognizes a contingent liability.

obligatory event is an event that gives rise to an existing obligation.

The amount of the provision recognized represents the best estimate of the costs that are required to settle the current obligation at the balance sheet date.

The financial statements of an organization reflect the financial position at the beginning and end of the reporting period, and not its position in the future. Therefore, no provision is recognized for costs that will need to be incurred in the future. The only liabilities that an entity recognizes are liabilities as of the balance sheet date. As estimated liabilities, you can recognize those that were in the past. These obligations include fines.

An obligation always presupposes the presence of a second party in relation to which the given obligation exists. Establishment of a specific party to which there is an obligation is not required. An event that did not give rise to an obligation may give rise to an obligation later (for example, a change in legislation). For a liability to meet the recognition criteria, the likelihood of an outflow of resources is required.

For the purposes of IAS 37 Provisions, Contingent Liabilities and Contingent Assets outflow of resources is treated as an event; the probability that an event will occur is greater than the probability that it will not occur. When it is probable that an event will not occur, an entity shall disclose a contingent liability.

An essential part of financial reporting is the use of estimates. In some cases where a reliable estimate cannot be made, there is a liability that cannot be recognised. This liability should be treated as a contingent liability.

THE CONCEPT OF "CONTINGENT LIABILITIES"

According to IFRS No. 37 "Provisions, contingent liabilities and contingent assets" contingent liabilities are defined as:

1) a possible obligation arising from past events and the existence of which is confirmed by the occurrence or non-occurrence of a future event;

2) a present obligation arising from past events that is not recognized because the amount of the obligation is not measured reliably.

An entity shall not recognize a contingent liability. When disclosing a contingent liability, the nature of the contingent liability must be taken into account. If the entity bears consolidated liability for a liability, then the portion of the liability that is owed to the other party is recognized as a contingent liability. An entity needs to recognize a provision for that part of the obligation for which an outflow of resources is most likely. The exception is cases where it is difficult to make a reliable assessment.

Types of contingent liabilities:

1) an obligation that exists as of the reporting date in respect of the amount or period of fulfillment, in respect of which there is uncertainty;

2) an obligation, the existence of which at the reporting date is confirmed by the occurrence or non-occurrence of future events.

A contingent liability must be valued in monetary terms. To do this, the necessary calculation is made and its confirmation is provided (for example, by auditors or experts). When evaluating contingent liabilities, an entity should exercise due diligence.

Ways of monetary valuation of contingent liabilities:

1) choice from some set of values. In this case, the weighted average value is taken as an estimate. This value is calculated as the average of the products of each value by the probability;

2) selection from the range of values. As an estimate, the enterprise takes the arithmetic mean of the largest and smallest values of the interval;

3) selection from a certain set of intervals of values. First, the arithmetic mean values are determined from the largest and smallest values of each interval, and then the corresponding interval of values is evaluated. The resulting weighted average is taken as an estimate of the contingent liability.

The financial statements must disclose the amount of the contingent liability. When assessing a contingent liability, it is necessary to take into account the amount of a counterclaim or the amount of claims against third parties. This is done in cases where the right to claim arises as a result of the corresponding conditional fact.

THE CONCEPT OF "CONDITIONAL ASSETS"

The reporting procedure for contingent assets is determined by IFRS No. 37 "Reserves, contingent liabilities and contingent assets".

The standard deals with accounting and disclosure rules for contingent assets other than those that are:

1) the result of financial instruments that are measured at fair value;

2) the result of contracts to be performed;

3) are dealt with in other IFRS.

Contingent Assets is a possible asset that arises from past events and whose existence is evidenced by the occurrence or non-occurrence of future events not wholly within the control of the bank.

The company should not recognize a contingent asset in the financial statements as this gives rise to income. Contingent assets arise from unplanned events. They create an opportunity for economic benefits to flow to the organization. If the realization of income is indeed determined, then the corresponding asset is not a contingent asset. The recognition of such a contingent asset must be carried out in accordance with the Principles for the preparation and preparation of financial statements. Under these Principles, an asset in the financial statements is defined by the future economic benefits embodied in that asset.

Future Economic Benefits is the potential that will enter the cash flow or cash equivalents of the bank.

Financial result of conditional assets can only be set on the occurrence or non-occurrence of one or more uncertain events in the future.

Events after the reporting date are those events that occurred between the reporting date and the date of the decision to authorize the financial statements.

Events after the balance sheet date may:

1) confirm the conditions that existed at the reporting date;

2) indicate the conditions that arose after the reporting date.

If events after the balance sheet date provide an entity with the necessary additional information with which to make an estimate of the amounts associated with the conditions at the balance sheet date, then contingent assets need to be adjusted in accordance with those events.

If events after the balance sheet date did not affect contingent assets as of the balance sheet date, these events should be disclosed in the notes to the financial statements.

Estimation of contingent assets must be carried out continuously to ensure that changes in events are reflected in the reporting. If the inflow of economic benefits has become probable, then the entity shall recognize the corresponding income in the period in which the change occurs.

ASSESSMENT OF LIABILITIES

The amount recognized as a provision should be an estimate of the cost to settle the current obligation at the balance sheet date.

Best cost estimate is the amount that the company would have paid to satisfy the obligation at the balance sheet date or transferred to a third party at that date. When valuing a single liability, the most likely outcome may be the best estimate. The company should consider other options as well. If there are other results that could be above or below the best estimate, then the highest or lowest amount will be considered the best estimate. Liabilities must be assessed before tax is calculated.

Risks and uncertainties must be taken into account in the best estimate of the amount of the estimated liability. Risk is inherent in such a quality as the variability of the result. Estimated liability amount may increase or decrease by adjusting for risk. In times of uncertainty, care must be taken in estimating liabilities so as not to overstate income and assets and reduce costs or liabilities.

If the time value of money has a significant effect, then the amount of the provision is the discounted value of the costs that must be incurred to satisfy the obligation. The discount rate must be pre-tax. It reflects current market estimates of the time value of money and risk. The discount rate does not reflect the risk for which cash flows are adjusted. Future events that affect the performance of the obligation should be reflected in the amount of the provision. This is only possible if these events happen.

When determining the amount of the estimated liability there is no accounting for a gain on the expected disposal of the asset. If costs that are necessary to settle the liability are recovered by another party, such reimbursement is recognized only if the reimbursement is received by the company that settles the obligation. In the income statement, it is necessary to present the amounts for the estimated liability minus the amount of compensation. It is necessary to analyze the estimated liabilities at each reporting date, as well as to adjust them for the best estimate. A provision is canceled if an outflow of resources that provided an economic benefit is no longer probable to settle the obligation. Provisions are not recognized for future operating losses.

GENERAL PROVISIONS IFRS No. 38 "INTANGIBLE ASSETS"

Purpose of IAS 38 Intangible Assets - determining the accounting treatment for intangible assets that are not specifically addressed in other financial reporting standards. This standard specifies how to measure the carrying amount of intangible assets.

Intangible assets - assets of a long-term nature that do not have a physical substance, but have a value based on the rights and privileges of the owner (patents, copyrights, trademarks, licenses, know-how, etc.).

Intangible assets are accounted for at cost.

When acquiring intangible assets for a fee, the cost price includes: the purchase price and the directly attributable costs of getting the asset ready for use.

IAS 38 does not apply to:

1) intangible assets that are within the scope of another international standard;

2) financial assets;

3) the rights to minerals and the costs of exploration, development and extraction of minerals;

4) intangible assets that are intended for sale in the course of ordinary activities;

5) deferred tax assets;

6) lease agreements;

7) assets arising from employee benefits;

8) intangible assets arising from the contractual rights of the insurer under the insurance contract.

Stages of creating an asset

1. Research stage. Costs are recognized as expenses in the period in which they are incurred.

2. Development stage. Intangible assets are recognized when the following conditions are met:

1) the technical completeness of intangible assets is such that they are suitable

for implementation and use;

2) there is confirmation that the use of this asset will generate income, calculations of the economic efficiency of the use of the asset have been made, there is a sales market;

3) it is possible to accurately estimate the amount of costs incurred at the stage of development of this intangible asset.

According to IAS 38, the useful life of an intangible asset is defined as:

1) the period of time over which the entity expects to use the asset;

2) the quantity of products that the company expects to receive with the help of this asset.

Depreciation - the systematic allocation of the depreciable amount of an intangible asset over its useful life.

Depreciation methods:

1) straight-line accrual method;

2) decreasing balance method;

3) method of production units.

Depreciation is recognized as an expense. The company must choose a depreciation method at the end of each financial year. If there is a change in the flow of economic benefits from an asset, the depreciation method needs to be reviewed.

VALUATION AND RECOGNITION OF INTANGIBLE ASSETS

When an entity recognizes an item as an asset, the item must meet the following requirements:

1) definition of an asset;

2) compliance with the recognition criteria.

Asset recognition criteria:

1) the future economic benefits attributable to the asset will flow to the entity;

2) the value of the asset can be measured reliably.

These requirements apply at the stage of acquisition or internal production of the asset. The entity shall carry out the probabilities of future economic benefits. To do this, it is necessary to use reasonable assumptions that will reflect the best estimate of the set of economic conditions.

An intangible asset should be initially measured at cost.

Cost price is the amount of cash or cash equivalents paid to pay for the cost of an asset at the time of its acquisition or construction.

The price paid by an entity to separately acquire an intangible asset reflects an expectation of the likelihood of future economic benefits.

The cost of a separately acquired intangible asset must be measured reliably.

Cost of a separately acquired intangible asset СЃРѕСЃС,РѕРёС, РёР ·:

1) the purchase price, which includes import duties and non-refundable purchase taxes, after deducting trade discounts;

2) direct costs of bringing the asset to working condition.

Direct costs include:

1) the cost of employee benefits;

2) the cost of professional services incurred in bringing the asset to working condition;

3) the cost of checking the operation of the asset.

Costs that are not included in the cost:

1) the cost of introducing a new product or service;

2) the costs of doing business in a new location or with a new category of customers;

3) administrative and other general overhead costs.

One or more intangible assets may be acquired in exchange for a non-monetary asset. The cost of such intangible assets is measured at fair value, unless:

1) the exchange operation has no commercial content;

2) it is impossible to measure the fair value.

To determine the criteria for recognition of assets, an entity should divide the process of creating an asset into two stages:

1) research stage;

2) development stage.

Intangible assets that have arisen from the exploration stage are not subject to recognition. An intangible asset arising from development is recognized if:

1) available for use or sale;

2) will generate probable economic benefits.

INTANGIBLE ASSETS WITH A DETERMINATED AND INDETERMINATED LIFE

Useful life :

1) the period of time over which the entity expects to use the asset;

2) the number of units of production or similar units that the entity expects to obtain from the use of the asset.

Amortized amount of an intangible asset with a finite useful life distributed over this period. The depreciation method reflects the pattern of consumption by the entity of future economic benefits. If it is not possible to determine such a schedule, then the straight-line accrual method should be used. The depreciation expense for each period is recognized in profit or loss.

The residual value of an intangible asset with a definite useful life should be assumed to be zero. The following cases are an exception:

1) there is a third party obligation to acquire the asset at the end of its useful life;

2) the existence of an active market for the asset: residual value is determined by reference to this market if such a market will exist at the end of the useful life of the asset.

The residual value of an intangible asset may increase to an amount equal to or greater than the carrying amount. In such cases, the depreciation charge on the asset is zero. This is possible if, in the future, the liquidation value does not become less than the book value.

The period and method of amortization of an intangible asset with a definite useful life should be reviewed at the end of each financial year. If the estimated useful life differs from previous estimates, then a change in the depreciation period must be made. If there has been a change in the estimated schedule for the consumption of future economic benefits, then the depreciation method must be changed.

Intangible asset with an indefinite useful life not subject to depreciation.

The useful life of a non-depreciable intangible asset should be reviewed in each period to determine whether events and circumstances continue to support the assessment that the asset has an indefinite useful life. If a negative answer was received, then it is necessary to change the estimate of the useful life from indefinite to definite. A change in the estimated useful life of an intangible asset from indefinite to definite indicates that the asset may be impaired. The asset should be tested for impairment.

DISCLOSURE OF INFORMATION ON INTANGIBLE ASSETS IN THE FINANCIAL STATEMENTS

An entity shall disclose the following information for each class of intangible asset:

1) useful life - indefinite or definite;

2) methods of amortization of intangible assets with a certain useful life;

3) gross book value and accumulated depreciation at the beginning and end of the period;

4) line items of the income statement, which reflect the amortization of intangible assets;

5) book value at the beginning and end of the period, which discloses: assets that are classified according to their purpose; increments indicating how they were obtained - from internal development, acquired separately, received through business combinations; the increase or decrease in value that arose during the period due to revaluation and impairment loss; depreciation recognized during the period; impairment losses during the period; exchange differences; impairment losses reversed in profit or loss during the period.

Class of intangible assets is a group of assets that are similar in nature and use in an entity's operations.

Classes of intangible assets:

1) brand names;

2) publishing rights;

3) computer software;

4) licenses and franchises;

5) copyrights, patents and industrial property rights;

6) recipes, formulas, models, drawings and prototypes;

7) developed intangible assets.

An entity shall disclose information about impaired intangible assets in the financial statements.

Under this standard, financial statements must disclose:

1) for an intangible asset with an indefinite useful life - the carrying amount and data that allow us to consider that the useful life is not determined;

2) description, carrying amount and remaining amortization period of the intangible asset;

3) for intangible assets acquired through a state subsidy: fair and initial value of these assets; their book value; the method by which the assessment was carried out after recognition - at cost or using the revaluation method; the value of contractual obligations for the acquisition of intangible assets.

If intangible assets are carried at revalued amounts, an entity shall disclose the following information:

1) the date on which the revaluation was carried out;

2) book value;

3) the value of the increase in value from the revaluation;

4) methods used to calculate the fair value of assets.

OBJECTIVES of IAS 39 FINANCIAL INSTRUMENTS: RECOGNITION AND MEASUREMENT

Objective of IAS 39 Financial Instruments: Recognition and Measurement - establishment of principles for the recognition and valuation of financial assets.

This standard applies to all types of financial instruments. The exception is:

1) stakes in subsidiaries, associates and joint activities;

2) the rights and obligations of employers under employee remuneration programs;

3) rights and obligations under lease agreements;

4) rights and obligations that have arisen under insurance contracts;

5) financial guarantee agreements (including letters of credit and other loan repayment guarantees);

6) contracts for compensation due to future events in the event of a business combination;

7) contracts containing a requirement to make payments that depend on climatic and geological variables;

8) liabilities on loans that are not repaid by offsetting counterclaims in cash or other financial instruments.

A derivative is a financial instrument or other contract that has the following characteristics: its value is subject to change due to fluctuations in interest rates, security rates, exchange rates, price or rate indexes, and other variables; for its acquisition there is no need for initial investment; calculations on it will be made in the future.

Requirements for financial assets:

1) classification by purpose - for sale: acquired for sale or repurchase in the short term; part of the portfolio of identifiable financial instruments; a derivative instrument (except if the derivative instrument is a hedging instrument);

2) financial assets must be determined at initial recognition at fair value through profit or loss, except for investments in equity instruments, the fair value of which cannot be measured reliably.

Embedded Derivative is a component of a complex financial instrument that affects cash flows. A derivative financial instrument that is attached to a financial instrument but is contractually transferred independently of that financial instrument is not an embedded derivative but a separate financial instrument. Conditions for separating an embedded derivative from the host contract: 1) the economic characteristics and risks of the embedded derivative are not related to the economic characteristics and risks of the host contract; 2) the individual instrument meets the definition of a derivative instrument

RECOGNITION AND DERECOGNITION IN FINANCIAL INSTRUMENTS

An entity may recognize a financial asset or financial liability in the balance sheet if it becomes a contracting party to that financial instrument.

Cases of derecognition of a financial asset:

1) the contractual rights to claim cash flows have expired on the financial asset;

2) there has been a transfer of the asset.

When a financial asset is considered transferred: the contractual rights to receive cash flows from the financial asset have been transferred; the contractual rights to receive cash flows from the financial asset are retained, but the entity has entered into a contractual obligation to pay those cash flows to recipients as agreed.

If a transfer results in derecognition of a financial asset, resulting in a new financial asset for the entity, the entity recognizes it at fair value.

After derecognition of a financial asset the full difference between the carrying amount and the consideration received for the derecognised portion should be recognized in profit or loss.

Recognition and derecognition of sale of financial assets must be accounted for using the trade date accounting method or the settlement date method.

Write-off from the balance sheet of a financial liability possible if it is executed, canceled or expired.

Exchange of debt instruments accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid should be recognized in the income statement.

When providing a non-monetary collateral by the transferring party, it is necessary to check:

1) whether the acquiring party has the right to sell or repledge the subject of pledge;

2) whether there are violations of the transferring party in its obligations.

The pledged asset should be accounted for as follows: if the acquirer has the right to sell the collateral, the transferor of the asset must reclassify the asset; if the receiving entity sold the collateral provided to it, it must recognize the proceeds from the sale at fair value; if the party transferring the asset fails to comply with the terms of the contract, it loses the right to redeem the collateral, this party must derecognise this collateral, and the party receiving the asset must recognize the collateral as its asset at fair value.

VALUATION OF FINANCIAL INSTRUMENTS

On initial recognition of a financial asset or financial liability, an entity must measure it at fair value.

Classification of financial assets after measurement at historical cost:

1) financial assets measured at fair value through profit or loss;

2) investments held to maturity;

3) loans and receivables;

4) financial assets available for sale.

After recognition, an entity measures financial assets at their fair value, excluding transaction costs that it may incur to sell and dispose of the assets. The exceptions are: loans and receivables, held-to-maturity investments; investments in equity instruments.

All financial assets, other than those at fair value through profit or loss, must be tested for impairment.

After initial recognition, an entity must measure its financial liabilities at amortized cost using the effective interest method. The exception is :

1) financial liabilities that are measured at fair value through profit or loss;

2) financial liabilities that arose upon the transfer of financial assets.

The fair value of a financial liability with the right to demand cannot be less than the amount that is required to be paid on demand when a claim is made for that amount.

A gain or loss from a change in the fair value of a financial asset should be recognized as follows:

1) profit or loss on a financial asset or financial liability must be recognized in the profit and loss account;

2) a gain or loss on a financial asset available for sale must be recognized in equity through the statement of changes in equity.

As of the reporting date, an assessment is made to determine whether there is any indication that a financial asset may be impaired. A financial asset is impaired and an impairment loss arises when there is an indication of impairment as a result of events that occur after the asset was recognized.

Losses expected as a result of future events are not recognised.

Signs of impairment of financial assets:

1) financial difficulties experienced by the issuer or the debtor;

2) breach of contract;

3) provision by the creditor of preferential conditions;

4) the probability of bankruptcy or financial reorganization of the borrower;

5) the disappearance of an active market for this financial asset;

6) decrease in estimated cash flows for a group of financial assets.

IFRS No. 40 INVESTMENT PROPERTY

Purpose of IAS 40 Investment Property - establishment of the procedure for accounting for investment property and relevant disclosure requirements.

investment property Property (land or a building, or part of a building, or both) held (by the owner or the lessee under a finance lease) to earn rentals, capital appreciation, or both, but not for:

1) production or supply of goods, provision of services, for administrative purposes;

2) sales in the ordinary course of business.

Owner occupied property - property held for use in the production or supply of goods, provision of services or for administrative purposes.

fair value - the amount of money for which an asset can be exchanged in a transaction between well-informed, willing to make such a transaction, independent of each other parties.

Book value - the amount at which the asset is recognized in the balance sheet.

Cost price (original cost) - the amount of cash or cash equivalents paid.

Investment property objects:

1) land intended to benefit from the appreciation of capital in the long term, and not for sale in the short term;

2) a facility owned by the reporting entity and leased out under one or more operating leases;

3) land, the further purpose of which has not yet been determined;

4) a structure not currently occupied, but intended for lease.

Investment property should be initially valued at cost. The initial estimate should include transaction costs. The cost of investment property acquired includes the purchase price and any direct costs. Direct costs include professional legal fees, transfer taxes and other transaction costs. Subsequent costs should be charged to the increase in the carrying amount of the investment property.

Accounting models:

1) at historical acquisition cost - investment property is stated at its residual value (net of impairment losses);

2) at fair value - investment property is carried at fair value and changes in fair value are recognized in the income statement.

DISCLOSURE OF INFORMATION ABOUT INVESTMENT PROPERTY

Investment property under IAS 40 is recognized as an asset if it is probable that future economic benefits will flow from the investment activity and if the value of the investment property can be measured reliably.

Under the fair value model, an entity measures investment property at fair value. Gains or losses arising from changes in value are recognized in profit or loss in the period in which they occur. The value of investment property should reflect market conditions at the reporting date. If an entity carries an investment property at fair value, it must carry it up to the date of disposal.

Under the cost model, investment properties are valued at cost less accumulated depreciation and accumulated impairment losses.

In reporting, an entity should disclose the following: information:

1) investment property accounting model;

2) criteria for distinguishing between investment property, owner-occupied property, property held for sale (criteria are indicated if it is impossible to classify the accounting model);

3) recognized as profit or loss rental income from investment property, direct operating expenses arising from operations with investment property from which rental income was received and not received;

4) obligations under the contract for the acquisition, development of investment property, repair.

If an entity applies the fair value model, additionally disclose: information:

1) reconciliation data between the book value of investment property at the beginning and end of the period;

2) the increase in the value of investment property resulting from a business combination;

3) net profit (loss) received as a result of fair value adjustment;

4) reclassification of investment property.

If an entity uses the cost model, it discloses the following: information:

1) depreciation methods, useful life, depreciation rates;

2) reconciliation of the book value of investment property at the beginning and end of the reporting period;

3) reclassification of investment property.

IAS 41 AGRICULTURE

Goal IFRS No. 41 is to establish the procedure for accounting, presentation of financial statements and disclosure of information on agricultural activities.

Agricultural activity - is the management of the biotransformation of biological assets in order to obtain agricultural products or the production of additional biological assets.

Objects of agricultural activity:

1) biological assets;

2) state subsidies;

3) agricultural products at the time of their collection.

agricultural products - products collected from the biological assets of the company.

biological asset - animal or plant.

Biotransformation processes: growth; degeneration; production of products; reproduction.

Biological assets group An association of similar animals or plants.

Collection of agricultural products - separation of products from a biological asset or termination of life of a biological asset.

Types of agricultural activities:

1) animal husbandry;

2) growing gardens and plantings;

3) floriculture;

4) forestry;

5) harvest once a year or throughout the year;

6) cultivation of aquatic biological resources (including fish farming).

Characteristics of agricultural activities:

1) the ability to change;

2) change management;

3) evaluation of changes.

Book value - the amount at which an asset is recognized in the balance sheet.

fair value - the amount of cash sufficient to acquire an asset or settle a liability in a transaction between well-informed and independent parties. The fair value of an asset depends on its location and condition at a given point in time. A biological asset at initial recognition and at each reporting date must be measured at fair value less estimated costs to sell.

Agricultural products that have been harvested from a company's biological assets should be valued at fair value, which is determined at the time of harvest, excluding estimated marketing costs.

The fair value of a biological asset or agricultural product is determined by grouping biological assets according to their main characteristics.

Cost and fair value are equal if no significant biotransformation has occurred since the initial cost, or if the biotransformation is not expected to have a significant effect on price.

Author: Shreder E.G.

We recommend interesting articles Section Lecture notes, cheat sheets:

▪ General surgery. Lecture notes

▪ Sociology. Lecture notes

▪ History of the new time. Crib

See other articles Section Lecture notes, cheat sheets.

Read and write useful comments on this article.

<< Back

Latest news of science and technology, new electronics:

Artificial leather for touch emulation 15.04.2024

In a modern technology world where distance is becoming increasingly commonplace, maintaining connection and a sense of closeness is important. Recent developments in artificial skin by German scientists from Saarland University represent a new era in virtual interactions. German researchers from Saarland University have developed ultra-thin films that can transmit the sensation of touch over a distance. This cutting-edge technology provides new opportunities for virtual communication, especially for those who find themselves far from their loved ones. The ultra-thin films developed by the researchers, just 50 micrometers thick, can be integrated into textiles and worn like a second skin. These films act as sensors that recognize tactile signals from mom or dad, and as actuators that transmit these movements to the baby. Parents' touch to the fabric activates sensors that react to pressure and deform the ultra-thin film. This ... >>

Petgugu Global cat litter 15.04.2024

Taking care of pets can often be a challenge, especially when it comes to keeping your home clean. A new interesting solution from the Petgugu Global startup has been presented, which will make life easier for cat owners and help them keep their home perfectly clean and tidy. Startup Petgugu Global has unveiled a unique cat toilet that can automatically flush feces, keeping your home clean and fresh. This innovative device is equipped with various smart sensors that monitor your pet's toilet activity and activate to automatically clean after use. The device connects to the sewer system and ensures efficient waste removal without the need for intervention from the owner. Additionally, the toilet has a large flushable storage capacity, making it ideal for multi-cat households. The Petgugu cat litter bowl is designed for use with water-soluble litters and offers a range of additional ... >>

The attractiveness of caring men 14.04.2024

The stereotype that women prefer "bad boys" has long been widespread. However, recent research conducted by British scientists from Monash University offers a new perspective on this issue. They looked at how women responded to men's emotional responsibility and willingness to help others. The study's findings could change our understanding of what makes men attractive to women. A study conducted by scientists from Monash University leads to new findings about men's attractiveness to women. In the experiment, women were shown photographs of men with brief stories about their behavior in various situations, including their reaction to an encounter with a homeless person. Some of the men ignored the homeless man, while others helped him, such as buying him food. A study found that men who showed empathy and kindness were more attractive to women compared to men who showed empathy and kindness. ... >>

Random news from the Archive

SilverStone Nightjar NJ600 fanless power supply 06.10.2018

SilverStone Technology's Nightjar power supply line will soon be expanded with the 600-watt NJ600. The device is notable for its modular cable connection system, and due to the high level of efficiency (up to 96% in 230 V networks), confirmed by the 80 Plus Titanium certificate, it is content with completely passive cooling.

The SilverStone Nightjar NJ600 fanless power supply has one 12-volt line rated for a continuous load of 50 A (600 W). The device includes protection systems against short circuits, overheating, over and under voltage, over current and over power, and the voltage deviation of +12 V, +5 V and +3,3 V from the nominal values does not exceed 2%. PSU weight is 1,8 kg, dimensions - 170 x 150 x 86 mm.

The strengths of the novelty also include the presence in the delivery set of two (4+4)-pin EPS12V cables and a pair of cables with two (6+2)-pin PCI-E Power connectors.

The warranty period is three years.

News feed of science and technology, new electronics

Interesting materials of the Free Technical Library:

▪ section of the Electrician website. PUE. Article selection

▪ Vestal article. Popular expression

▪ article Sports. Big encyclopedia for children and adults

▪ article Draftsman-designer. Job description

▪ article Tone controls on the K548UN1 chip. Encyclopedia of radio electronics and electrical engineering

▪ article Repair of electric shaver Kharkiv. Encyclopedia of radio electronics and electrical engineering

Leave your comment on this article:

All languages of this page

Home page | Library | Articles | Website map | Site Reviews