Work on the creation of accounting standards in Russia began in 2015. Then the Ministry of Finance approved the program for their development by order No. 64n. By 2016, the work was completed. Currently, the program includes 29 accounting standards. According to the decree of the department, they should come into force in stages from January 1, 2018. The introduction into practice should be completed by 2020. At the same time, amendments will be made to existing laws, Regulations on accounting and reporting, and other regulatory documents.
Public sector organizations
Special accounting standards have been developed for these entities. All of them are combined in the "Conceptual basis of accounting and reporting." This document sets out:
- Key documentation methods.
- Accounting objects, rules for their recognition, evaluation.
- General procedure for the formation of information reflected in the statements, qualitative characteristics of the information.
- Principles of preparation of documentation.
- Basic requirements for the inventory of liabilities and assets.
Public sector organizations are required to apply these accounting standards from Jan 1. 2018 At the same time, reporting for 2017 is formed according to the previous rules.
What remains unchanged?
The accounting standards for public sector organizations include certain provisions contained in section 1 of Instruction No. 157n. In particular, the following remained unchanged:
- The circle of subjects of accounting.
- Rules for the formation of the chart of accounts.
- Accounting methods (accrual, double entry, recognition of expenses and income).
- Requirements for the compilation and storage of primary documentation and registers.
- Workflow order.
- Requirements for the inventory of liabilities and assets.
Wording Adjustment
Separate principles are set forth in the new standards and the Federal Law "On Accounting" more clearly than in existing instructions. This, in particular, is about the assumption of temporary certainty. It means that the recognition of objects is carried out in the period in which there were facts of economic activity of the enterprise, as a result of which they arose or changed, regardless of the write-off or receipt of money.
In addition, the definition of material information has received a clearer formulation. Data is recognized as such if its omission or distortion may affect the decision of the founders or other interested parties, which is adopted by them on the basis of information from accounting documents. The materiality of the information depends on the level of influence of its absence or distortion. There is no single quantitative criterion for evaluating this indicator. In this regard, the degree of materiality is determined in each case individually.
Reporting Classification
The standards for public sector organizations include certain provisions from the first sections of the Instructions, approved by orders of the Ministry of Finance No. 33n and 191n. They specify the list of reporting entities, the rules of desk audit, and adjustments to the information enshrined in the Federal Law "On Accounting".
In addition, the classification of reporting is fixed. According to the accounting standard, it is divided into:
- General and consolidated (by the degree of generalization of data and the order of their formation).
- General and special purpose (according to the degree of disclosure).
This classification is also defined in the normative acts in force today. However, the Standard contains a full description of it.
Accounting Objects
The new Accounting Standard for public sector organizations discloses definitions of liabilities, assets (including net), expense, income.
Assets are recognized as assets (including cash in cash and non-cash forms):
- Owned by the institution or owned by the organization.
- Controlled as a result of business transactions.
- With useful potential and able to bring economic benefits.
The terms of the asset use new terms. One such concept is useful potential. He considers the suitability of the asset for use in the activities of the organization, for the exchange, repayment of obligations. Moreover, the operation of property does not always have to be accompanied by receipt of money. In relation to an asset, it is enough that it serves for the organization to carry out its tasks and achieve goals. Accordingly, the object has certain consumer qualities.
Upcoming economic benefits are considered to be the receipt of money or their equivalents due to the use of the asset. For example, it can be rental payments.
The institution’s control over the asset indicates the organization’s right to use the object (temporarily including) to derive future economic benefits or useful potential, the ability to regulate or exclude third-party access to it.
International Accounting Standards
To ensure the unity of recognition, assessment, disclosure of information on financial and economic operations in the world market, IFRS was developed. International accounting standards ensure comparability of financial documentation between enterprises and the availability of information for external users.
IFRS can significantly reduce the costs of economic entities in the preparation of statements. This is especially important for companies with an extensive network of representative offices in different countries. At the same time, enterprises using international standards significantly reduce the cost of raising capital.
The market value of capital depends on the risks and prospects of return. Certain risks are determined by the specifics of the enterprise. However, many of them are associated with a lack of information on the effectiveness of investment. The reason for this is the lack of standardized reporting. IFRS solves this problem. That is why many countries are striving to implement international standards in their practice.
Open information attracts more investors. They, in turn, are ready to make less profit, realizing that greater data transparency provides a significant reduction in risks.