Types of accounting in different countries. Accounting in foreign countries

Bashkir Academy of Public Administration and Administration under the President of the Republic of Bashkortostan

Branch professional retraining

“Enterprise (business) valuation”

Course work in the subject "Accounting and audit"

On the topic: “Accounting in foreign countries”

Completed:

Abubakirova N.N.

Checked:

Art. pr. departments

"Accounting

and audit” UGNTU

Kireeva O.A.

The purpose of the course work is to summarize the principles of accounting in various national systems.

In the process of work, various research methods were used: generalizations, comparative analysis, systematization, methods of logical data linking.

The course work consists of three chapters. The first chapter discusses the concept of accounting and reporting in foreign countries. The second chapter contains the basic requirements for reporting. The third chapter provides an analysis of national accounting systems, and considers in more detail the French chart of accounts as the closest to the Russian one.

Chapter 1accounting in foreign countries

Abroad, the basis for determining the financial result is the use of the method input-output recommended for use by the standards of the International Committee on Accounting Standards and the Fourth Direk t willow of the European Economic Community in 1978.

The basis for this is the determination of the financial result commensuration costs with release in financial accounting, costs are taken into account only by elements, which makes it possible to determine the newly created value and financial result in accounting.

The overall financial result is established by two options, ensuring the preservation of the features of the French and Anglo-Saxon accounting systems. In the French version, the overall result of the enterprise is determined by summing in of operational, financial and extraordinary results.

Financial accounting is designed to determine the financial position of the company by zones (risk, constant attention, normal operation, expansion) depending on the share of own balance sheet sources and the turnover rate of working capital, financial results then in for the period and the level of liquidity of funds and sources of the firm. She is t mandatory and regulated by the state. Mandatory financial accounting in the countries of Eastern Europe arises when the following t th indicators: headcount - 50 people, balance sheet total - ECU 1 million, annual sales volume - ECU 2 million. A simplified version is used by firms that, at the balance sheet date, do not exceed two wow of these three limits.

· Application of IFRS as national standards. These countries include: Cyprus, Kuwait, Latvia, Malta, Pakistan, Trinidad and Tobago, Croatia;

· the use of IFRS as national standards, but with the condition that national standards are developed for issues not covered by international standards. Such countries are Malaysia and Papua New Guinea;

· the use of IFRS as national standards, but in some cases it is possible to modify them in accordance with national circumstances. These are Albania, Bangladesh, Barbados, Zambia, Zimbabwe, Kenya, Colombia, Poland, Sudan, Thailand, Uruguay, Jamaica;

· national standards are based on IFRS and provide additional clarifications. Among such countries are China, Iran, Slovenia, Tunisia, the Philippines;

· national standards are based on IFRS, but some standards may be more detailed than IFRS. Such countries are Brazil, India, Ireland, Lithuania, Mauritania, Mexico, Namibia, the Netherlands, Norway, Portugal, Singapore, Slovakia, Turkey, France, Czechoslovakia, Switzerland, South Africa;

· national standards are based on IFRS, except that each national standard includes a provision comparing the national standard with IFRS. (Australia, Hong Kong, Denmark, Italy, New Zealand, Sweden, Yugoslavia.)

The issue of adoption of IFRS by the EU countries is now being discussed, at least in relation to companies whose shares are listed on stock exchanges. Since these standards provide a system that allows new financial entities to use an internationally recognized accounting framework, many developing countries have begun to use them as well.

Consider the positive and negative features of International Financial Reporting Standards.

Their objective advantages over national standards in individual countries are:

clear economic logic;

· generalization of the best modern world practice in the field of accounting;

ease of perception for users of financial information around the world.

At the same time, international standards allow not only to reduce the costs of companies preparing their financial statements, especially in the context of the consolidation of the financial statements of enterprises operating in different countries but also reduce the cost of raising capital.

However, the shortcomings of IFRS should also be noted. These include, in particular:

· the generalized nature of the standards, providing for a fairly large variety of accounting methods;

· lack of detailed interpretations and examples of application of standards to specific situations.

In addition, factors such as national differences in development and traditions, as well as the reluctance of national institutions to give up their priority in the field of regulation and accounting methodology, impede the implementation of standards around the world.

The International Accounting Standards Committee takes these negative factors into account and is actively working to eliminate them. Thus, on January 1, 1989, the Committee published document E32 “Comparability of financial statements”, which contains 29 proposals to limit the choice of accounting methods allowed by current IFRS. This document is considered by many experts as one of the best projects IASB. It allows, to a certain extent, to eliminate a number of differences in the content of reporting and simplify the procedures for its transformation when conducting a comparative analysis in an international context.

Chapter 2. National Accounting Systems

2.1. Types of national accounting systems

National principles governing record keeping differ significantly. But it is possible to single out groups of countries that adhere to the same type of approaches to building an accounting system, and there are no two states where the accounting rules would be absolutely identical. One of the most common is the three-model classification of accounting systems. It includes:

1. British-American model (Great Britain, USA, Netherlands, Canada, Australia, etc.);

2. Continental model (Germany, Austria, France, Switzerland, Italy, etc.);

3. South American model (Brazil, Argentina, Bolivia, etc.)

The first model is characterized by a focus on the needs of a wide range of investors (it is due to a highly developed securities market, the lack of legislative regulation of accounting, which is regulated by standards developed by professional organizations of accountants), the flexibility of the accounting system, the high educational level of both accountants and users of financial information.

The second model is distinguished by the presence of legislative regulation of accounting, close ties between enterprises that are the main suppliers of capital, the orientation of accounting to the state needs of taxation and macroeconomic regulation, and the conservatism of accounting practice.

Third model. Its main feature is the orientation of the accounting methodology to a high level of inflation.

The presence of different approaches to the formation of accounting systems makes it difficult for national enterprises to “communicate” at the international level. Since the rules for the preparation and publication of financial statements differ from country to country, it becomes necessary to study these differences.

One of the factors that determine significant differences in the financial statements of different states is, of course, the legal system. Depending on the type of legislation and the degree of state influence on various aspects of life, most countries can be conditionally divided into two groups:

1) those countries that have legislation of general legal orientation;

2) countries that have an extensive code of laws.

In the states belonging to the first group, the laws, as it were, indicate the limits within which individuals and legal entities have freedom of action. Such a common law system was originally formed in Great Britain and is present in many countries with traditionally close ties with it ( federal law USA, the legal system of Ireland, India, Australia and a number of other countries). The activities of companies are not regulated in detail, and the rules for the preparation and publication of financial statements are not specified. Accounting standards in these countries are not regulated by the state, but are determined by various professional organizations of accountants.

In the countries of the other group, legislation is based on Roman law. This legal system determines the laws of a strictly determined nature, individuals and legal entities must follow the letter of the law. Most countries introduce into the rank of law and accounting standards; all activities in the field of accounting are detailed and fairly strictly regulated. The main task of accounting in such countries is the calculation of state taxes and control over their payment. These states include Germany, France, Argentina and others.

Differences in the preparation and publication of accounting reports are greatly influenced by the existing financial system in the country, as well as the forms of companies and types of ownership in which they are located. For example, in Germany, Japan, Switzerland, financial policy is determined by a small number of very large banks. The latter not only satisfy a significant part of the financial needs of the business, but are often the owners of the companies. Thus, in Germany, the majority of the shares of a number of joint-stock companies of an open type are under the control or significant influence of banks, especially such as Deutsche Bank, Dresdner Bank, Commerce Bank and others.

In France, Italy, Sweden and a number of other countries where small family businesses predominate, accounting has a slightly different orientation. The main providers of capital in their markets are both banks and government bodies, which not only control the financial capabilities of the business, but also act (if necessary) as an investor or lender. In the above countries, firms must follow unified accounting standards, which is due to the influence of government bodies on the processes of preparing and compiling financial statements. In a number of countries (Germany, France and Italy) companies are required by law to issue detailed audited financial statements. In France and Italy, the government has established special bodies to regulate and control the securities markets, which may mean significant shifts in the development of financial reporting associated with the Anglo-American experience.

Another factor in the existence of differences in international financial reporting is the tax system. An example of such an impact is the practice of "deferred" taxation used in the British accounting model. It lies in the fact that the income of companies, measured according to general rules accounting often differs from the income on which taxes are levied. The most common reason for this discrepancy is that the accelerated depreciation tax credit is deductible from income regardless of the depreciation method chosen. It should be noted that within the British-American model there are some differences in tax calculations. You can consider the tax on the entire amount of income from which it will be charged, and the difference between the amount received and that which will actually be paid in this reporting period, be considered as a long-term debt, or you can limit tax deductions to the amount of the current payment. In the USA and Canada, the first option is applied, that is, “full tax distribution”. This approach contrasts with the practice in the UK, which uses a “partial distribution of the tax”, which is, as it were, an intermediate position between the two alternatives. Such differences significantly affect the comparability of after-tax earnings between US and UK companies. In this regard, in the US, UK and other countries using the British-American accounting model, the issue of deferred taxation has caused considerable discussion and has led to a large amount of standardized documentation.

In countries that use the continental accounting model, the taxation rules are basically the same as the accounting rules, and therefore there is no problem of deferred taxation as such. For example, in Germany, tax legislation establishes depreciation rates based on the expected useful life and applied to strictly defined assets. However, in some cases, accelerated depreciation is allowed, for example, for industries that produce energy-saving and anti-pollution environment products. However, depreciation charges that reduce profit before taxes, although they are reflected in the financial statements, do not cause deferred tax problems.

Significant differences in financial reporting arise when accounting for inflation. There are currently two widely used financial reporting methods:

1) accounting at current cost;

2) accounting for the total purchasing power.

There are also some differences in approaches to the problem of reflecting inflationary processes in financial statements. UK in the late 1960s. the economy underwent significant changes associated with rising prices, and between 1971 and 1974 a number of documents were developed on this issue, based on the general purchasing power method. However, in the annual balance sheets of companies that provide additional financial statements based on changes in total purchasing power, there was conflicting information regarding the meaning of the adjusted indicators.

In continental Europe, inflation accounting has not received sufficient development. After numerous discussions among EU accountants, an agreement was reached to account for rising prices at acquisition prices, although EU countries were allowed to allow or prohibit companies from inflation-adjusted asset valuation based on inflation-adjusted data at their own discretion. In general, it can be noted that European countries are not inclined to deviate from the principles of accounting based on historical cost.

Depending on the country of application, there are also significant differences in the theory and practice of consolidated accounting. These differences relate to the extent to which consolidated financial statements are used; definitions of the term “group” (association of companies) for the purposes of applying the consolidated financial statements; the nature of the information provided by the external user; and methodological issues.

Consolidated accounting reports first appeared in the United States at the beginning of the century and were widely developed. In the UK, the need to maintain single accounts, most often in the form of consolidated financial statements, was enshrined in law in 1947 and is currently regulated by national standards. In continental Europe, the process of introducing consolidated reporting has developed more slowly, and there are still different approaches to solving this issue.

Since the Companies Act in 1989, British law has treated the group as a unit that controls the activities of subsidiaries and entities under significant influence. American practice is based on the concept of the parent company and on the method of accounting for equity; the fusion method is widely used. The legislation and legal practice of Germany on the issues of consolidation used to be quite seriously at odds with the British and American counterparts, but approached them as a result of the implementation of the foundations of the 7th EU Directive adopted in 1983. In France, enterprises are singled out under the sole control of the consolidating company (fully consolidated); entities under joint control (consolidated in an appropriate proportion) and entities over which significant influence is exercised. Dutch practice is similar to that of the UK and provides that financial information relating to subsidiaries must be included in the group's annual report prepared on a consolidated basis. The method of accounting for equity is also widely used, and, unlike other EU countries, the named method is used both in subsidiaries and in the financial statements of holding companies; thus, the profit of the latter is equal to the consolidated profit. In Belgium and Spain, consolidation before the 1980s was rare, leaving outside investors and lenders, especially foreign nationals, with inadequate information about even large groups.

Thus, despite the fact that international accounting practice has not yet been brought to a common denominator, in most developed countries of the world it is increasingly clear that differences in national accounting systems become a brake on the development of economic cooperation between them, narrowing opportunities for integrating their economies. In this regard, their efforts are becoming more noticeable, if possible, to bring national accounting systems together, to level the differences between them.

3.2. French Chart of Accounts

The transition to separate financial and managerial accounting requires making significant adjustments to the current Chart of Accounts. The French Chart of Accounts can be taken as the basis as the closest to ours and at the same time providing separate financial and management accounting.

The French chart of accounts includes 10 classes (sections). Of these, 7 classes are allocated for financial accounting accounts:

à class 1 – capital accounts;

à class 2 – fixed asset accounts;

à class 3 - inventory and work in progress accounts;

à class 4 – accounts of third parties;

à class 5 - financial accounts;

à class 6 - expense accounts;

à class 7 - income accounts.

In each class of accounts, the correspondence of accounts is strictly regulated and ordered. Two classes of accounts (eighth and ninth) are allocated for management accounting. There is no strict regulation of accounts here, each company solves these issues on its own. One class of accounts (zero) is allocated for off-balance sheet accounts.

The added value created by the organization is calculated as the difference between the proceeds from the sale of products (accounts 70-74) and expenses (accounts 60-62). From an economic point of view, accounts 60, 61 and 62 accumulate all settlements with third parties, which can be considered as “exchange transactions” between economic entities that do not lead to the creation of added value.

According to the definition, value added is the contribution of a particular organization to the process of production and sale of products. The contribution of the organization directly depends on the number and qualifications of personnel, as well as on the availability of equipment necessary for the production and sale of products. Value added reflects the real economic weight of the organization. It allows you to compare performance and acts as an indicator of economic growth.

As defined in the French chart of accounts, operating balances are resources generated in the course of operating activities to a) replenish and increase working capital, and b) pay financial remuneration for the use of borrowed or equity funds. The balance of operating activities is the main source of income for the organization, ensuring its liquidity. The share of the balance of operating activities in value added depends on the specific sector of the economy.

It should be emphasized that the standardized codification of accounts facilitates the calculation of all intermediate results. This advantage is of particular importance in the analysis of economic activity at the state level.

The Bureau financial analysis The Bank of France analyzes the annual accounts of companies and draws up a report that contains analytical data on the financial performance of each company. Companies voluntarily submit their balance sheets and income statements to the Bureau.

The Bureau's report can be viewed as a comparative analysis that allows you to quickly examine various aspects of the company's financial situation. The indicators reflect the strengths and weaknesses of the enterprise, which helps to focus on the most pressing problems that require serious analysis. The main purpose of accounting is to provide information for decision making. As for the Bureau's financial report, it helps entrepreneurs develop business strategies.

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Application

Table 1.Main comparative characteristics financial and management accounting

Areas of comparison

Financial Accounting

Management Accounting

1. Mandatory record keeping

Required by law

By decision of the administration

2. Accounting purposes

Compilation of financial reports for users outside the organization

Assisting the administration in planning, management and control

3. Main consumers of information

Individuals and organizations outside the enterprise

Different levels of enterprise management

4. Types of accounting systems

Double entry system

Any system that satisfies the information needs of management

5. Freedom of choice

Mandatory adherence to generally accepted accounting principles

The main criterion is the suitability of information

6. Used meters

Currency at the exchange rate in effect at the time of the transaction

Monetary and natural units of measurement calculated at current or future value

7. The main object of analysis

Business unit as a whole

Degree of detail required for management purposes

8. Frequency of reporting

Regular: monthly, quarterly, yearly

Floating frequency, as the need arises

9. Degree of information accuracy

Requires objectivity, historical in nature

Estimates and forecasts are used along with verified information

10. Temporal correlation of information

Information about completed transactions and economic acts

Analysis of the past and forecast of the future

7. See for example: Ostrovsky O.M. Accounting standards in Russia // Accounting. 1994. N8; Sokolov Ya.V. Fundamentals of accounting theory. - M., Finance and statistics, 2000.
Tkach V.I., Tkach M.V. International system of accounting and reporting. - M., Finance and statistics, 1992; Needles B., Anderson H., Caldwell D. Principles of accounting.: Per. from English. - M., Finance and statistics, 1993.

Accounting principles around the world vary significantly. These differences are due to the variety of existing forms of business organization and, as well as the impact on the practice of accounting for external factors (economic, political, social, geographical, etc.). It is possible to single out methodological, methodological and organizational peculiarities accounting systems in different countries.

Methodological differences are due to different legal frameworks, established traditions, and practical experience.

Methodological differences are associated with the accounting tradition, mainly with subjective factors: habits, the nature of professional training, etc.

Organizational differences in each country are due to forms of ownership, management structure, specialization and concentration of production.

National features of accounting systems are determined by various factors:

· the influence of leading theorists and professional organizations;

economic consequences of adopting a particular system;

the general economic situation in the country;

· tax policy;

· national peculiarities;

users and the goals they set for themselves;

the legal environment;

· sources of financing;

the influence of other countries;

· the influence of the general atmosphere in the country (tense or calm) (2.21).

Many experts classify accounting and reporting systems, bringing them into groups. It is possible to distinguish cluster groups of countries with similar cultural and economic situations and with the same approaches to the accounting and reporting system. Most often, the following accounting models are distinguished (3.16).

1. British-American model. The basic principles of this model were developed in Great Britain, the USA and Holland, therefore it is also called British-American-Dutch. This model operates in a developed financial and equity markets, where most companies find additional sources of financial resources. The model is focused on the interests of medium and small shareholders-investors. The accounting methodology is determined by an independent professional community, after which accounting standards are approved by law and their observance is mandatory. That is, professional accounting regulation is applied, and not its direct state regulation. The basic principle of accounting is formulated as "reliable and objective information". This model is considered the most liberal and the least conservative, as it contains alternative options for valuation and accounting. The options chosen by the enterprise are drawn up by them in the form of an accounting policy. Charts of accounts are professional, that is, they are developed by enterprises independently. It is generally accepted that the high level of professional training of accountants in these countries is recognized.

This accounting model is used in Australia, Great Britain, Venezuela, Hong Kong, Israel, India, Indonesia, Ireland, Canada, Pakistan, USA, South Africa and other countries.

2. Continental model. It is mainly characteristic of European countries and most French-speaking African countries. The model is focused on banks and the tax rules of the state, which basically satisfy the needs of companies in financing. In this model, accounting is regulated by law, but in alternative valuation options and with a unified chart of accounts, although professional charts of accounts are used in a number of countries. The model is conservative. Accounting practice aims to meet the requirements of the government, especially with regard to taxation in accordance with the national macroeconomic plan. Orientation to the management requests of creditors is not a priority task of accounting.

This model is applied in Austria, Algeria, Belgium, Greece, Denmark, Spain, Italy, Cameroon, Morocco, Norway, France, Germany, Switzerland, Sweden, Japan and other countries.

3. South American model. The model focuses solely on tax rules. Its main difference is the adjustment of accounting data for inflation rates. The accounting methodology is legally unified. Accounting is generally oriented to the needs of state planning bodies. The information necessary to control the execution of tax regulations is well reflected in accounting and reporting.

The South American model is used in Argentina, Brazil, Bolivia, Guyana, Paraguay, Peru, Uruguay, Chile and Ecuador.

4. Islamic model. This model develops under the great influence of theological ideas and has a number of features. It is not represented by official financial statements and works on accounting theory. It is not covered by anyone and not generalized. But some of its features can be noted. for example, it is prohibited to receive financial dividends for the sake of actual dividends; when assessing the assets and liabilities of companies, preference is given to market prices.

5. International model. The need to develop this model stems from the need for international accounting consistency, primarily for the benefit of MNEs and foreign participants in international currency markets.

In the context of the globalization of the economy, the creation of regional economic spaces (the Single Market in Europe, NAFTA on the American continent), the expansion of investment opportunities, the development of international financial markets, and the turbulent processes in the field of information technology, everything greater value acquires the need for unification of accounting. The development of business, accompanied by an increase in the role of international integration in the economy, imposes certain requirements on the uniformity and clarity of the principles used in different countries for the formation of algorithms for calculating profits, the tax base, the conditions for investing and capitalization of earned funds, etc. Recently, given the widespread introduction of modern communication technologies, the requirements for a uniform interpretation of the financial statements of companies have increased even more.

Currently, in solving the problem of accounting unification, two approaches are most famous: harmonization and standardization.

Idea harmonization various accounting systems implemented within the European Community (EU)

Its essence lies in the fact that each country may have its own accounting model and a system of standards governing it. The main thing is that these standards do not contradict similar standards in the member countries of the community, that is, they are in relative "harmony" with each other. Work in this direction has been carried out since 1961. In order to form a concept for the development of accounting in the EU countries, a research group on accounting problems was formed. Its activity was considered as an integral part of the program of harmonization of national versions of the law on companies. The results of this work are directives issued on behalf of the Council of the EU, which are approved by the national legislation of the EU member states, designed to streamline and harmonize the financial statements of companies. At the same time, it should be emphasized that the EU directives are generally based on the continental (mainly German) accounting and reporting system, but are influenced by the British, and now also the American one.

Currently, the EU has different rules for preparing financial statements, which are based on the national standards of the EU member states. The existing contradictions are eliminated by carrying out appropriate reforms, which contributes to the formation of a single capital market in the EU.

Harmonization of various accounting systems is a much longer process than the process of standardization, as a result of which national accounting standards are brought into line with international ones.

Idea standardization accounting procedures is implemented as part of the unification of accounting. The essence of the work is to develop a unified set of standards applicable to any situation in any country, which eliminates the need to create national standards. That is, standardization involves the development of a unified set of standards for accounting procedures applicable in any country.

International standards unify the following accounting requirements:

criteria for entering into the reporting of its various elements;

rules for evaluating reporting elements;

the amount of information provided in the reporting.

At the same time, international standardization of accounting and reporting is not limited only to the tasks of unification and uniformity in the formation of reporting information of enterprises located in different countries, but also provides for the linkage of forms and methods of current accounting.

Following international reporting standards makes it possible to achieve its greater correctness due to the unity of the requirements for compilation. Uniform requirements reduce distortion and arbitrariness, which may be associated with an emphasis on irrelevant details, an arbitrary assessment of reporting articles, a selective attitude to the content and types of reports, and deliberate falsification of information. In addition, the presentation of national economies in international statistical reference books should be comparable within the generally accepted alternatives which gives international accounting standards national significance.

International accounting standardization fully meets the interests of transnational companies. The activities of TNCs cover the interests of investors in many countries, so their reporting is guided by international standards. For them, the priority of any national accounting system may lead to the impossibility of an objective assessment of the effectiveness of investments.

In recent years, there has been a significant convergence between harmonization and standardization. Moreover, the previously developed EU directives will obviously gradually be brought into line with international financial reporting standards.

Since the formation of international standards is strongly influenced by the accounting of the United States, which has extended its influence to almost all countries of the world as owners of the most powerful economic potential and is the world's financial center, one has only to say that the conceptual framework for accounting in the United States was developed by the Standards Board

Financial Accounting (FASB) and are presented in the form of six Regulations on Financial Accounting Concepts (SFAC). The purpose of the development of conceptual provisions is to determine the principles on the basis of which accounting standards for reporting (GAAP) are formed.

The US accounting system in our country is known as GAAP (General Accepted Accounting Practice), or generally accepted accounting principles, which, in fact, serve as accounting standards. Initially, the US GAAP system included documents covering accounting policies and accounting techniques.

The American system has evolved enough long time in a competitive capitalist economy. Accordingly, the concept of financial accounting has grown there from intra-company accounting in small enterprises, during their transformation into large joint-stock companies. During their development, there was no single concept of accounting. Thus, development proceeded gradually, and all concepts were developed as the need for them arose. This happened, for example, with the concept of depreciation, which entered the circle of concepts of accountants and entrepreneurs only with the advent of large capital structures, such as railways, when the problem arose of distributing their value over the period of time during which they are used.

In American accounting theory, there are three periods of development:

• - informal period - until the beginning of the 30s of our century;
• - period of problem solving;
• -the emergence of the FASB - Financial Accounting Standards Board (Accounting Standards Board) in 1973;

And the development of the conceptual framework of financial accounting.

The fundamental difference between the Russian and American accounting systems can be noticed immediately, as soon as we take a closer look at their definition. The generally accepted American definition of financial accounting states that “Financial accounting is the process resulting in the preparation of financial statements regarding the enterprise as a whole, which are used by both external and internal users ... This reporting provides a consistent and continuous monetary history of economic resources and company obligations and economic activity that changes those resources or commitments”

The definition of accounting according to the Russian tradition is somewhat different: “Accounting is a system for monitoring, measuring, registering, processing and transmitting information in valuation about property, sources of its formation (obligations), and business operations of an economic entity (legal entity)”.

The main difference can be distinguished in what the main attention of the determinant is directed to. In the first case, accounting is a process leading to a result (financial reporting), the correct presentation of which is the purpose of accounting. The main thing is not the process itself, but the result. In the second case, accounting is considered as a system in which all its components are equivalent, and the purpose of the system is determined separately.

On the one hand, the situation with the United States is more simple: literally several laws serve as the legislative basis for the general regulation of financial accounting and reporting, primarily laws on securities and stock exchanges. However, not only and not so much laws and regulations regulate financial accounting in the United States. In each auditor's report, there is a mention that the reporting provided complies with GAAP - Generally Accepted Accounting Principles - generally accepted accounting principles. However, not only does there not exist a single document or set of documents in which these principles would be formulated, there is not even a single generally accepted definition of what it is. Determining whether a particular principle is generally accepted or not is still not the most elementary task. Even the criteria for classifying this rule as generally accepted have not been established. The SEC requirements themselves are only a subset of GAAP.

There are four levels of documents in the GAAP system:

• 1) Level A: Financial Accounting Standards (issued by the FASB), Interpretations (issued by the FASB), Opinions (published by the APB), Accounting Research Bulletins (published by the AICPA);
• 2) level B: technical bulletins (issued by FASB), sectoral accounting and auditing manuals (published by AICPA), explanations (published by AICPA);
• 3) level C: general opinions of the working group, practice bulletins (published by AICPA);
• 4) level D: accounting commentaries (published by AICPA), application guidelines (published by FASB), accounting industry generally accepted practice.

The basis of GAAP is Level A documents, which are given preference in the event of discrepancies and disagreements.

Several professional organizations are currently involved in the standards development process in the US: the Financial Accounting Standards Board (FASB); Securities and Exchange Commission (SEC); American Institute of Certified Public Accountants (AICPA); American Accounting Association (AAA); Government Accounting Standard Board (GASB).

The basis on which the principles are based are the objectives of accounting. We can say that the goals of accounting in Russia and the United States are quite different. If we single out the main requirement for reporting, then we can say that if in the United States the main requirement is the reasonableness and usefulness of information for the user to make commercial decisions, then in Russia the main requirement is compliance with various accounting rules, providing formally correct information of a control nature. And this difference of ends must not be overlooked, since the application of a principle that is identically named and defined can be quite different in its application to different ends.

Although it may seem strange, the basic principles of accounting declared in the new Russian system and in the American one practically coincide, although, of course, not verbatim and their significance is different. But there is an important problem of hierarchical subordination of goals, principles and specific methods, which must be taken into account.

In the US, the purposes of accounting and reporting are dominant. They are subject to principles, which in turn are subject to accounting methods. In Russia, the tasks and principles of accounting are also the basis, but if a specific methodology prescribed by law contradicts the tasks or even the principles of accounting, then priority is still given to this methodology, and not to the principles. This leads especially to big problems in cases where the application of this methodology contradicts the specific circumstances of economic activity.

In Russia, there are four main forms of accounting:

• - memorial order system;
• - journal-order system;
• -automated system;
• -simplified system for small businesses.

The memorial-order system involves the compilation of a posting (memorial order) for each primary document, then these orders are registered in the registration journal, and then in the General Ledger. Separately, analytical accounting is carried out in cards. This system is distinguished by its great simplicity, standardization, reliability and extreme cumbersomeness, which nullifies all its advantages. Currently, it is common only in relatively small enterprises.

The journal-order system implies the reflection of transactions in journals grouped by separate synthetic accounts. Entries are made in the journal associated with the account being debited, with only the amount of the transaction and the account being credited indicated. According to the journals, the General Ledger data is generated. Although this system reduces the burden on the accountant, it reduces the possibility of internal operational analysis.

The operation of an automated system may vary depending on the software used, but the common thing for all methods is the transfer of data to machine media (by manual or automated input of primary information), after which further processing of information up to receipt of reporting is carried out in electronic form. Naturally, the quality of such a system is determined primarily by the parameters of the software used, but usually it provides more analytical and control capabilities than other manual methods.

A simplified system, the use of which is provided for small businesses. It allows you to register primary documents directly in the statements for analytical accounting, and record the results of the statements in the book (journal) of business transactions. With a small number of transactions (up to 100 per month), enterprises that do not carry out production activities are allowed to use only the book for registering business transactions. Its main and almost the only advantage is to reduce the burden on the accountant.

But the American system has its own specifics. There really is no regulation and the company is practically unlimited in the way of maintaining accounting registers. The most common way is the journal system. This system provides for the registration of source documents in journals (journals), from which transactions are transferred to the general ledger or separate books for special types of transactions (for example, a separate book can be created to account for settlements with suppliers). Usually a general journal is created, plus several journals for frequently performed operations. This system is simpler than the memorial-order system, and more flexible than the magazine-order system, since it allows the compilation of complex entries (compound entries).

In the United States, the principle of double entry is regarded as a purely technical technique; accordingly, it pays much less attention to the correspondence of accounts, at least, it does not recognize any special economic meaning (unlike in Russia). The rejection of the concept of correspondence somewhat impoverishes analytical capabilities, but it allows you to make complex transactions when several accounts are credited and debited at the same time. This possibility, which is completely unrecognized in Russia, not only simplifies the work of an accountant, but also allows you to more accurately track the economic meaning of the operation, allowing you not to split it into several amounts, depending on which account the corresponding amount was received.

Reporting is a natural result of the accounting process. In the US, financial reporting is inextricably linked with the process of financial accounting, but the reporting of only a limited number of organizations is regulated, primarily joint-stock enterprises whose shares are listed on the stock exchange, and enterprises of regulated industries. For other companies, financial accounting and reporting is a purely voluntary process, and the form of reporting may be determined by the firm. Further, almost always, when a firm is required to provide financial statements, it is required to obtain an auditor's report on these statements.

In Russia, the preparation of financial statements is mandatory for all enterprises. The form and composition of this reporting is determined by the state, which, represented by its bodies, is one of the main consumers of information from these reports. Also, obtaining an audit opinion, although not required for all reporting organizations, is for a significantly larger number of enterprises (in percentage terms) than in the United States.

In principle, the composition of financial statements in the US and Russia is quite close, the differences are noticeable mainly when comparing the methodology underlying them.

Composition of reporting

In Russia, financial statements consist of several parts:

• - “Balance sheet - form N 1;
• - Report on financial results - form N 2;
• -explanations to the balance sheet and income statement:
• - Report on the movement of capital - form N 3;
• - Traffic report Money- form No. 4;
• -Appendix to the balance sheet - form N 5;
• - explanatory note;
• - the final part of the auditor's report issued based on the results of the mandatory audit of financial statements under the legislation of the Russian Federation.

In the US, the composition of financial statements is less clearly defined. Its approximate composition is given in tab. 1. As you can see, the number of types of mandatory disclosures is less, but in general their structure is similar. It may also be noted that it is not uncommon for the equity statement to be replaced with a Retained Earnings Statement if there has been no change in equity.

The level of importance of different reports differ from each other. The US is currently maximizing the value of the income statement and increasing the value of the cash flow statement. In Russia highest value given to the balance sheet.

Table 1. Approximate composition of financial statements in the United States

All financial statements
Regulated by FASB
Regulated by AISPA auditing standards
Basic reports	Applications to financial statements	Additional Information	Other financial statements
Statement of Financial Position-Balance Sheet	Accounting policy	Price change	Materials of management analysis
Income Statement-Income Statement	Debt accrual.	Data on stocks of petroleum products	Information for shareholders
Cash Flow Statement	Inventory accounting methods
Equity Statement - Owners" Equity Statement	Alternative valuations of assets and liabilities

Reporting procedure

In Russia, it is mandatory to submit financial statements to the following addresses:

• - founders, participants of a legal entity in accordance with the constituent documents;
• - State Tax Inspectorate (in one copy);
• - territorial bodies of state statistics at the place of registration of organizations.

In the US, it is mandatory to provide financial statements to shareholders and the SEC (Securities and Exchange Commission). In the IRS (Inland Revenue), financial reporting is not automatically provided, and reporting to organizations that carry out its statistical compilation is the business of the enterprise itself.

In both countries, the timing of reporting (publication) is regulated. In the US, they are tied to the end of the financial year and the shareholders' meeting. In Russia, reports must be submitted by April 1 for annual reports and within 30 days after the end of the reporting period for current reports.

Differences in reporting.

There are a number of discrepancies in the reports in Russia and in the United States, both in their form and content.

Formal differences are mainly due to the fact that in Russia the forms in which reports are provided are rigidly fixed. The need to create universally applicable reporting forms has led to the fact that the information in them is broken down in exceptional detail. However, such detail does not, unfortunately, increase the analytical usefulness of these reports, and often simply overloads them with information. Also, due to the peculiarities of accounting for items such as equity or VAT, before using the reporting for analytical purposes, it is necessary to clear the balance sheet currency. Some differences from the American system are caused simply by a different target orientation of reporting. Thus, disregard for the interests of shareholders has led to the fact that the payment of dividends is not allocated as a separate line in the income statement, but is lost in the line “Distracted funds”, and such an important factor for the United States as the ratio of earnings per share to its market value is not indicated there. (P/E ratio).

In the United States, it is not the format of the reports that are provided, but the amount of information that must be disclosed in them. Even such generally accepted things that are contrary to Russian practice, such as sorting assets in descending order of liquidity, and liabilities in descending order of demand, as well as the allocation of own capital (owners "equity) from the composition of liabilities as a separate source of resources along with liabilities (liabilities) in the American sense of this words (i.e. accounts payable) do not change the fact that the form of reporting is determined by the firm.If the enterprise sees fit, it can completely change the form of reporting.Orientation of reporting to provide useful information, combined with freedom in determining the actual the nature of information disclosure leads to the fact that really relevant information is disclosed, and the analyticity of reports containing less information is higher.

The UK has the oldest professional accounting organizations established in the last century, such as the Institute of Chartered Accountants of Scotland (1854), the Institute of Chartered Accountants of England and Wales, founded by decree of the Queen in 1894. These organizations have a long history of accounting regulation and the development of their own national accounting standards, which these organizations started even before the advent of the first IFRS. They are independent, not subordinate to any state bodies and are actively working on the development of accounting and reporting methodology, training of audit personnel. The development of accounting standards in the UK began in 1969.

However, although the titles of many British and International Standards (IFRS) are similar and address common issues, they are addressed in different ways. And large international British companies are forced to reform their reporting in accordance with international standards in cases of raising capital on international markets and quoting shares on stock exchanges in other countries.

To date, discrepancies between British and international standards have persisted, in particular, on the accounting and measurement of property, plant and equipment, investments, financial instruments, research and development costs, inventories, construction contracts, assets and liabilities in foreign currency, borrowing costs, as well as the recognition of income, pension contributions and the preparation of consolidated financial statements. The differences between British and international standards are most clearly manifested in approaches to the valuation of various assets, primarily fixed assets.

Foreign experience

ACCOUNTING IN FOREIGN COUNTRIES*

The article presents the features of national and international accounting and reporting standards of Israel, Slovakia, Latvia and Ukraine.

Key words: standard, accounting, IFRS, law, reform, documents, accounting policy.

The textbook edited by Doctor of Economics, Professor, Honored Worker of Science and Technology of Ukraine F. F. Butynets, consisting of several parts, reveals the features of accounting, auditing and economic analysis, the specifics of regulatory regulation in more than 40 countries, as well as training programs for accounting personnel and requirements for auditors. In addition, the manual highlights the basic rules for accounting for various objects in the countries mentioned, which makes the publication especially useful for students, practitioners and researchers of accounting, analysis and audit problems.

L. Davuliene, candidate of economic sciences, senior expert (Lithuania) took part in the writing of the first part of the manual, devoted to Belarus, Bulgaria, Lithuania, Russia, Ukraine and the Czech Republic; E. Druzhinina, assistant (Belarus); T. Zhilinskaya, postgraduate student (Belarus); L. Kaz-lauskienė, Director of the Institute of Accounting (Lithuania); V. Kivachuk, Candidate of Economic Sciences, Associate Professor (Belarus); S. Korotaev, Candidate of Economic Sciences, Associate Professor (Belarus); N. Malyuga, Doctor of Economics, Professor (Ukraine); I. Mackevicius, Doctor of Economics, Professor (Lithuania); L. Meizlik, Candidate of Economic Sciences, Associate Professor (Czech Republic);

* LLC "Publishing house FINANCE and CREDIT" thanks the team of authors for the material provided.

O. Mironova, Doctor of Economics, Professor (Lithuania); M. Musov, doctoral student (Bulgaria); I. Pelyak, assistant (Czech Republic); L. Potonya, Senior Lecturer (Belarus); L. Prokhorova, undergraduate (Belarus); O. Senokosova, Senior Lecturer (Belarus); Y. Slapik, Associate Professor (Belarus); V. Yurchik, Senior Lecturer (Belarus).

Azerbaijan, Israel, Latvia, Moldova, Poland, Slovakia and Ukraine are represented in the second part of the manual. M. Vashekova (Slovakia), O. Veksler (Israel) worked on its creation; K. Winiarska (Poland); I. Vitola (Latvia), A. Yesemchika (Latvia), V. Zarina (Latvia), G. Kalninya (Latvia), S. Keish (Latvia), I. Leibus (Latvia), N. Malyuga (Ukraine) , I. Mackevicius (Latvia), D. Mokosheva (Slovakia), A. Polomosh-nykh (Moldova), A. Soopa (Latvia), V. Shelaginov (Azerbaijan), M. Steinman (Israel), V. Tsurkanu (Moldova).

The third part study guide will be devoted to Armenia, Great Britain, Germany, Denmark, Spain, Italy, the Netherlands, the USA, France and Sweden.

In this article, we will only consider the application of national and international standards in Israel, Slovakia, Latvia and Hungary.

The development of Israeli accounting standards began even before the formation of the state. In 1931, back in the days of the British mandate, i.e. 17 years before the formation of the State of Israel, the Chamber of Auditors was created, the founders of which formulated the basic standards of accounting in the country.

Traditionally, the state, until recently, was not the initiator of change.

niya and innovations on the organization of accounting, with the exception of the Law on Securities, which regulates the annual and quarterly reporting of listed companies, as well as a number of laws and regulations governing accounting in budgetary organizations and their tax reporting. Ironically, the law regulating the activities of the Chamber of Auditors (the Law on Auditors) was adopted only a quarter of a century after the founding of the Chamber - in 1955.

The Chamber of Auditors has created a set of accounting standards based on English accounting standards.

In the 1980s. the British approach could no longer fully satisfy all the requirements of modern business. Gradually, the English accounting rules, which are considered conservative in world practice, were replaced by more mobile American standards.

In order to maintain the professional level of Israeli professionals, the Chamber of Auditors published "open professional opinions" or instructions that are essentially a guide to action in the field of accounting and auditing.

In the 1990s. With the entry into the era of advanced technologies (hi-tech), accounting standards around the world, including in Israel, have undergone major changes.

The issuance of company securities as a means of encouraging workers has become the norm in most industrial firms. The use of futures contracts to mitigate commercial and foreign exchange risks required more detailed explanation in the financial statements. The merger of enterprises did not proceed in the same straightforward manner as decades ago. These and other factors have compelled the best accounting and audit professionals around the world to look for solutions that would meet modern requirements business.

In 1994, the Institute of Accounting Standards was formed under the leadership of the Israeli Chamber of Auditors.

Companies listed on the Tel Aviv Stock Exchange are required to comply not only with accounting standards, but also with the requirements of the Securities Act of 1968, which provide for

more stringent attitude to the rules of financial reporting in order to ensure its reliability.

The following accounting standards apply in Israel (Table 1).

In 2002, the European Union (EU) decided to draw up uniform accounting standards in force in the territory of the EU countries. Starting from 2005, all companies whose shares are listed on European stock exchanges are required to report in accordance with IFRS (SHIZ).

Since the shares of many Israeli companies are listed on both European and American stock exchanges, the Israel Accounting Standards Institute has allowed listed companies, since 2008, to present their financial statements in accordance with IFRS standards (SHIZ) even in cases where there are differences between IFRS ( Shiz) and Israeli standards approved by the Standards Institute, the Israeli Chamber of Auditors or the Securities Commission.

According to experts, the introduction of IFRS (SHIZ) will lead to both positive and negative results. On the one hand, the introduction of IFRS (IER8) is necessary for integration in the global market and to attract foreign investors. On the other hand, the new rules include elements that are very different from the principles of accounting conservatism currently in force in Israel. Thus, representatives of the Securities Commission believe that the introduction of IFRS (SHIZ) will “increase” on paper the profits of Israeli listed companies by an average of 8%. However, the current standards do not allow reflecting the real value of the company in the financial statements. The principle of asymmetry operates when the user of financial statements is in an unequal situation with the board of the company that compiles these reports.

So, for example, a construction company bought a land plot for development 15 years ago. The market price of the plot has increased ten times during this time, but only the company's management knows about this, since the true price of the plot is not reflected in the financial statements.

The introduction of IFRS (IER8) is intended to equalize the positions of management and the investor in

Table 1

Israeli Accounting Standards

Standard number Publication date Standard name

5 December 1999 Comments on the conclusion of the Chamber of Auditors 69 - "Charity Organizations"

issues of assessing the real value of the company (Table 2).

If there is no Israeli standard, then the American standard is used in the preparation of financial statements, and in case of its absence, the international standard.

SLOVAKIA

Characterizing Slovakia, it should be noted that since the political changes in 1989, when the process of transformation from a centrally planned economy to a market-oriented economy began, the following main changes in accounting legislation began:

In 1991 The Law on Accounting No. 563/1991 was drafted as the main accounting law in Czechoslovakia;

The harmonization process to prepare for entry into the EU required significant additions to the accounting legislation. It provided for the need to create a new law on accounting. Law No. 431/2002 "On Accounting" came into force on 01.01.2003. In addition to amending the Law on Accounting, some provisions on accounting procedures and the basis for the chart of accounts for those entrepreneurs who keep records in the double entry system have been changed. The changes were caused by the introduction of some IFRS rules:

International standards have been implemented on the basis of EU regulations related to the consolidated reporting of public companies, and since 2007 those legal

table 2

Comparative analysis international and Israeli accounting standards

Standard name US GAAP IFRS Israeli Accounting Standards

Events after the financial statements date FAS 1 IAS 10 RAP 11, AC7

Organizational contracts for the construction of the ARV 45 IAS 11 AC 4

Taxes FAS 109 IAS 12 None

Sector reporting FAS 131 IAS 14 AC 11

Impact of price changes and inflation on reporting FAS 89 IAS 15 RAP 36, RAP 50, AS 13

Leasing FAS 13, FAS 28 IAS 17 None

Income accounting CON 5 IAS 18 The same

Benefits and emissions for employees FAS 43, FAS 87, FAS 106, FAS 112 IAS 19 RAP 19-20

Financial Accounting for Government Grants - IAS 20 RAP 35

Effect of changes in exchange rates on financial statements FAS 52 IAS 21 AC 13

Combinations FAS 141 IFRS 3 None

Accounting for financial costs FAS 34 IAS 23 AC 3

Accounting for transactions with related parties FAS 57 IAS 24 RAP 29

Accounting for pensions and severance pay FAS 35 IAS 26 None

Consolidated financial statements and investments in subsidiaries FAS 94 IAS 27 RAP 57

Financial reporting during hyperinflation FAS 89 IAS 29 RAP 36, RAP 50, AC 12

Reporting on joint transactions APB 18 IAS 31 RAP 57

Earnings per share FAS 128 IAS 33 PAP 55

Financial statements for the preliminary (quarterly) period APB 28 IAS 34 RAP 43, AS 14

Discontinued operations FAS 39 IAS 35 AC 8

Depreciation of the market value of assets FAS 144 IAS 36 AC 15

Financial instruments FAS 133, FAS 107 IFRS 3 None

Intangible assets FAS 2, FAS 142 IAS 38 The same

Real estate investment None IAS 40 AC 16

legal entities who must apply IFRS in the preparation of individual financial statements.

The Ministry of Finance of the Republic of Slovakia is the developer of national legislation.

List of national standards. Law No. 431/2002 "On Accounting" is the main legal document. The Ministry of Finance of the Slovak Republic issues regulatory documents rather to clarify than to clarify the norms of the law in the form of various regulations for certain types of enterprises. Various regulations have been developed for different business entities:

Decree of the Ministry of Finance of the Republic of Slovakia of December 16, 2002 No. 23054/2002-92, which sets out

explanations of accounting procedures and the basis of the chart of accounts for entrepreneurs who keep records in the double entry system;

Decree of the Ministry of Finance of the Republic of Slovakia dated 17.12.2002 No. 4455/2003-92, which sets out the requirements for the structure, description and content of financial statements for an individual legal entity and the amount of data presented in financial statements to be published by entrepreneurs who maintain financial records in double bookkeeping system;

Decree of the Ministry of Finance of the Republic of Slovakia dated 17.12.2002 No. 23586/2002-92, which sets out the requirements for the structure, description and content of financial reporting items for an individual legal entity and the amount of data displayed in financial statements that are subject to

publications by entrepreneurs who keep financial records in a simple entry system and are engaged in business or other profitable activities, where they display the amounts of expenses incurred to generate income when determining the income tax base;

Decree of the Ministry of Finance of the Republic of Slovakia No. 20359/2002-92, which sets out the accounting procedures and the basis of the chart of accounts for banks, subdivisions of foreign banks, the National Bank of the Republic of Slovakia, the deposit protection fund, securities traders, representative offices of foreign securities traders, the investment guarantee fund, asset management companies, representative offices of foreign asset management companies and mutual funds;

Regulation of the Ministry of Finance of the Republic of Slovakia No. 5292/2005-74, which establishes the features of the construction and meaning of items in financial statements, the degree of information disclosure. This document applied by banks, branches of foreign banks, the National Bank of the Republic of Slovakia, the deposit protection fund, securities traders, representative offices of foreign securities traders, investment guarantee fund, asset management companies, representative offices of foreign asset management companies, mutual funds;

Regulation of the Ministry of Finance of the Republic of Slovakia No. MF / 8338 / 2005-74, establishing the features of the construction and meaning of items of individual financial statements, the degree of disclosure of information for publication. This document is applied by the National Bank of the Republic of Slovakia;

Decree of the Ministry of Finance of the Republic of Slovakia dated 03.12.2002 No. 22212/2002-92, which defines the accounting procedures and structure of the chart of accounts for insurance companies, divisions of foreign insurance companies, companies that specialize in reinsurance operations, divisions of foreign reinsurance companies, management of insurers in Slovakia (the Slovak Insurers" Office);

Decree of the Ministry of Finance of the Republic of Slovakia No. 12643/2004-74 defines the features of the construction, the significance of financial statements for publication. Stra-

insurance companies, subdivisions of foreign insurance companies, companies that specialize in reinsurance operations, subdivisions of foreign reinsurance companies, the Slovak Insurers Administration;

Resolution of the Ministry of Finance of the Republic of Slovakia No. 24501/2003-92 dated 11.12.2003, defining accounting procedures, the structure of the chart of accounts for state organizations (budgetary organizations, state funds, municipalities);

Decree of the Ministry of Finance of the Republic of Slovakia No. 22502/2002-92 dated 10.12.2002 defines accounting procedures and chart of accounts for non-profit organizations;

Decree of the Ministry of Finance of the Republic of Slovakia No. 1407/2003-92 dated 25.12.2003, which defines the features of the structure, the meaning of financial statements items, the content of items and the degree of information disclosure in financial statements. Applies government organizations, budgetary organizations, state funds, municipalities;

Decree of the Ministry of Finance of the Republic of Slovakia dated 16.12.2002 No. 22602-92 defines accounting procedures, structure, description and content of financial reporting items for legal entities and the degree of disclosure of financial reporting information, is subject to public disclosure by entrepreneurs keeping records in the simple entry system, which are non-profit organizations;

Decree of the Ministry of Finance of the Republic of Slovakia dated November 30, 2005 No. MF/22930/2005-74 defines accounting procedures, the structure of the chart of accounts for companies specializing in health insurance;

Decree of the Ministry of Finance of the Republic of Slovakia dated 14.12.2005 No. MF 2293/2005-74 determines the specifics of the construction of financial statements, the meaning of their articles, content, and the degree of disclosure of financial statements that are subject to public disclosure. Used by companies that specialize in health insurance.

Accounting rules for business entities are established by Decree of the Ministry of Finance of the Republic of Slovakia No. 23054/2002-92 dated December 16, 2002 (Slovak Double Entry Accounting Details), which has the following structure:

1. General Provisions.

2. Accounting procedures for asset valuation.

3. Accounting procedures in specific situations.

4. Special Provisions Regarding Accounting Methods.

5. Class of accounts 0 - "Non-current assets".

6. Class of accounts 1 - "Stocks".

7. Class of accounts 2 - "Financial accounts".

8. Class of accounts 3 - "Accounts of receivables and payables".

9. Class of accounts 4 - "Accounts of capital and long-term liabilities".

10. Class of accounts 5 - "Expenses".

11. Class of accounts 6 - "Income".

12. Class of accounts 7 - "Summing balance accounts and off-balance accounts".

13. Provisional and final provisions.

Financial reporting rules

business entities are established by Decree of the Ministry of Finance of the Republic of Slovakia dated 12/17/2002 No. 4455/2003-92 (Slovak Financial Statements Details), containing the following parts:

1. Basic provisions.

2. Balance sheet and income statement.

3. Notes.

4. Provisional and final provisions.

Application of IFRS (LAS/IFRS) in the country.

As a member of the EU, the Slovak Republic is required to take a decision from the EU Commission regarding the application of IFRS from 1 January 2005.

All companies whose securities are traded on a financial market must apply IFRS. However, for tax purposes, they must also calculate the tax base in accordance with the tax legislation of the Republic of Slovakia.

After the adoption of the Declaration of Independence (May 4, 1990), Latvia had to create a new legislative system. This marked the beginning of the transition from a centrally planned economy to a market economy, which

It led to a revision of the old institutions of power and legal legislation. The political situation dictated the creation of a new legislative framework in accounting, tax policy and audit.

With the beginning of the reform of the accounting system in Latvia, it was necessary to decide on the accounting system. It was proposed to choose one of the models of the EU countries or to reform the current accounting system, taking into account market relations. The concept was based on the Danish system, which is due to the following:

The Danish accounting system most fully met the requirements of international standards;

Denmark, like Latvia, is a small country with a unified accounting and taxation system.

The first legislative acts on accounting were approved by the Supreme Council of Latvia on 10/14/1992:

Accounting Law;

Law on annual reports of enterprises.

Ministry of Finance of Latvia by Order No. 63 dated 13.05.1993

approved the unified chart of accounts. Subsequently, Latvian legislation was harmonized with the norms of EU directives, international and American standards. In Latvia, accounting regulations are constantly being improved, which serve as the basis for the preparation of financial statements in accordance with EU requirements.

The Latvian Accounting Standards (LSAS) are developed by the Latvian Accounting Council and approved by the Latvian Cabinet of Ministers.

International normative documents regulating accounting. Another 10 years

ago it seemed impossible to harmonize financial reporting standards in accordance with the requirements of the EU and other international standards. The requirements for the preparation of annual reports in each individual state were individual and different, like the states themselves. Some countries tried to preserve their individuality and defended the preservation of the norms of laws. It was considered a national identity, tradition, and part of independence. Find common points

touch in solving this problem was not easy. In the process of organizing and developing the pan-European market, these complex issues also had to be addressed.

On the basis of the fourth (93/22/EEC) and the sixth (89/29B/EEC) EU directives, work has begun on the harmonization of European accounting. These directives define the accounting standards in EU companies. The fourth directive is the most important document defining the ways, forms and methods of harmonization and unification of accounting and reporting in Western Europe. This directive contains a set of basic requirements that the accounting of private companies, joint-stock companies and limited liability companies must comply with, and also defines the requirements for the format (list and grouping of indicators) according to which the balance sheet and profit (loss) report must be drawn up .

The accounting policies of banks and insurance companies are based on other directives. European directives came into force in the late 1970s and early 1980s. The minimum level of comparability of EU accounting and reporting is provided by directives. In order to effectively change the accounting policy, the norms of directives have been incorporated into national legislation. This is a labor-intensive and long-term process for all states. At the same time, the directives provide freedom of interpretation, which leaves the opportunity to maintain differences in the financial standards of European countries.

The main organization involved in the development of international standards is a special International Accounting Standards Committee - IAC (IASC). The basis for the development of international accounting standards are those procedures that have historically developed in English-speaking countries, mainly in the USA and Great Britain. A common fact that emphasizes the growing importance of international accounting standards is the participation of SMEs in a joint program with the International Organization of Securities Commissions (IOSCO), which brings together the governing bodies of world stock exchanges.

Latvian Accounting Standards. The traditions of each state in the field of accounting differ significantly from the requirements of IFRS. This creates significant difficulties for the transition from the application of national accounting standards to the application of international ones. Latvia can be attributed to the group of countries in which national accounting has developed in close accordance with the requirements of IFRS. In Latvia, work has begun on the development of national accounting standards that would be based on IFRS. Under the LAPR (Latvian Association of Sworn Auditors) a commission was established that was involved in the development of Latvian standards. Currently LTKSFU (Latvian Financial Accounting Standardization Technical Committee) is responsible for developing national accounting standards. It is imperative for companies to take into account and comprehend in a timely manner all aspects related to ensuring the compliance of financial statements with the requirements of international standards. This is due to the fact that when preparing an annual report, accountants must comply with the norms of the Latvian Accounting Standards (LAS). At the initial stage, it is necessary to assess the difference between existing accounting practices and international requirements. Annual reports for 2007 include the requirements of eight standards already in force (a total of nine standards have been approved):

1. Basic principles for the preparation of financial statements.

2. Cash flow statement.

3. Events after the balance date.

4. Changes in accounting policies, changes in accounting estimates and correction of errors from previous years.

5. Long-term contracts.

6. Income.

7. Fixed assets.

8. Savings.

9. Investment property.

is given in table. 3.

The provisions of these LAS are used in the process of making decisions regarding the management of property by the management of a business entity (Fig. 1).

Table 3

LSBU Summary

No. 1 “Basic Principles for the Preparation of Financial Statements” (Decision of the Council for Accounting and Accounting dated 05.02.2004, in force 13.02.2004) Summarizes and explains the main principles for the preparation of financial statements. The standard contains guidance on issues that have not yet been regulated, it defines the elements of financial statements, provides signs of the quality of financial information, the structure of the financial statement, information on the formation of a statement of changes in equity, reflection of accounting policies and other aspects of the preparation of financial statements. The standard applies to the financial statement of an individual entity prepared in accordance with the Law on Annual Reports and the consolidated annual report prepared in accordance with the Law on Consolidated Annual Reports. The standard uses the following terms: assets, equity, income, liabilities, revenue, acquisitions, expenses, losses. This concerns the definition of accounting objects as elements of accounting policies and their disclosure, indicating the content of accounting entries. Management selects and applies accounting policies in accordance with all requirements of each applicable LAS. Information must be disclosed in a way that is relevant, reliable, comparable and understandable. Additional explanations are required to enable users of the financial statement to understand the impact of specific transactions or events. Appendix to LAS No. 1 provides illustrated examples of the statement of changes in equity and the development of accounting policies

No. 2 “Cash Flow Statement” (Decision of the Board of Accountants dated 05.02.2004, in force 13.02.2004) Describes the preparation of a cash flow statement for enterprises that prepare their financial statements in accordance with the Law “On Annual Reports”. The standard characterizes cash flows that are reported as operating activities and as investing or financing activities, defines terms related to the cash flow statement, and explains how certain features of a transaction are reflected in the cash flow statement. The scheme of the statement of cash flow in the next reporting year is changed only if it is required by special circumstances and if the report was prepared according to one scheme for at least two consecutive years. The annex to the standard No. 2 provides an example that allows you to trace the preparation of a cash flow statement based on data from the situation described in the example.

No. 3 “Events after the balance sheet date” (decision of the Accounting Council dated 12/08/2004, effective from 12/18/2004) Establishes the procedure in accordance with which the enterprise reflects the events that became known in the period of time between the end of the reporting year and the date of approval of the financial report for publication: adjusting events that provide evidence of circumstances that existed at the balance sheet date; non-adjusting events that are indicative of circumstances that arose after the balance sheet date. It is important for users of financial statements to know when a financial statement is authorized for publication because it does not reflect events after that date. Each material non-adjusting event after the balance sheet date is reported by the type of event, a rough estimate

No. 4 “Changes in accounting policies, changes in accounting estimates and errors of previous years” (decision of the Accounting Council dated February 9, 2005, effective from March 15, 2005) The principle of materiality provides that all significant information should be reflected in accounting and reporting, on which the main indicators of the enterprise depend. Irrelevant information can be ignored. Materiality is recommended to be set in the accounting policy of the enterprise, indicating its size as a percentage

No. 5 “Long-term contracts” (decision of the Accounting Council dated July 12, 2005, in force since 2006 reporting year) Applies to long-term contracts. The contracts provide for the creation of assets, the date of commencement and completion of the work. They may be fixed price, where the contractor agrees to a fixed contract price or rate for each unit of output. Contracts may also include costs plus a markup, where the contractor is reimbursed for allowable or otherwise defined costs plus interest. Income related to a long-term contract includes the original cost of income stipulated in the contract, deviations from the contract, changes in claims and incentive payments.

Continuation of the table. 3

LSBU Summary

Income is measured at fair value or receivable. The estimate may be revised as a result of events and the resolution of uncertainties. In the calculation of profit or loss, the following are recognized: depreciation of construction equipment during its downtime, expenses for preparing a proposal for participation in a tender that was lost; accrual for doubtful receivables under previously completed contracts. The balance sheet recognizes settlements with customers, which include the debt under a previously completed contract, minus accumulations associated with the possibility of losing this debt, as well as accumulated receipts - income recognized in the reporting period under work contracts (no invoices issued)

No. 6 “Income” (decision of the Accounting Council on 07.12.2005, in force since the reporting year 2007) Establishes the procedure for recognizing income from the sale and transfer of assets for use by other persons. This Standard does not address income from long-term (LAS No. 5) and lease agreements, dividends from consolidated financial investments (accounted for in accordance with the equity method), as well as changes in the fair value of financial assets and liabilities, the value of other current assets, changes in value at the fair value of biological assets and mining. The transaction is usually recognized on a case-by-case basis. Income recognition applies to individual components of a single transaction. For example, if the sale price of a product includes a notional amount for its further maintenance, revenues are measured at the actual value of the contract received or receivable, taking into account discounts. Income is the amount received or receivable in cash or its equivalent. Otherwise, the actual value of the award may be less than the nominal amount. For example, issuing an interest-free loan to the buyer, receiving an IOU from the buyer with an interest rate below the market interest rate. The actual value of the award is determined by discounting all amounts to be received in the future

No. 7 “Fixed Assets” (decision of the Accounting Council dated 21.12.2005, effective from the reporting year 2006) The standard defines and clarifies the accounting for fixed assets and the presentation of information related to fixed assets in financial statements. The standard does not apply to land, a building or part of it that is accounted for as investment property, biological assets, minerals, similar non-renewable resources, rights to extract such resources. Fixed assets are recognized if future economic benefits are expected from their use at the enterprise. Also, fixed assets are recognized if their useful life exceeds one cycle of the ordinary activities of the enterprise and their cost can be estimated reliably. An asset is recognized when the entity assumes all the risks and rewards associated with the asset. The following information is disclosed in the appendix of the financial report for each balance sheet item for fixed assets: the applied valuation principles; applied wear methods; useful life or applicable depreciation rates; report on the movement of fixed assets; the presence and extent of restrictions on property rights and the book value of fixed assets pledged as security for obligations; cadastral value of real estate; amount of liabilities on fixed assets

No. 8 “Accumulations, possible liabilities and possible assets” (decision of the Accounting Council dated 12/21/2005, effective from 2006 reporting year) Determines the criteria for recognition and evaluation of savings, possible liabilities and possible assets, requirements for disclosure of information in the appendix of the financial report. The standard does not apply to savings arising from financial instruments valued at fair value; savings formed in connection with executable contracts, with the exception of encumbrance contracts; savings that are subject to the requirements of other LAS. Bad debt provisions are asset value adjustments that are not covered in this Standard. Accrued liabilities for goods and services received are also not covered in this Standard.

The end of the table. 3

LSBU Summary

No. 9 “Investment property” (decision of the Accounting Board dated 20.06.2007, effective from 2008) Recognizes investment property as an asset only when it is probable that the firm will receive future economic benefits associated with investment property. property; the value or fair value of the investment property can be measured reliably

Provisions are reviewed at each balance sheet date and adjusted to reflect the best estimate available at the balance sheet date, if possible. For correction, profit or loss calculation items are used. When savings are discounted, their value grows every year. This equates to interest payments on expenses (Figure 2).

Are there existing liabilities due to the event giving rise to the liability?

Does it exist

possible commitment?

Is an outflow of economic goods possible?

Is it possible to reliably calculate the amount?

Accumulation is recognized

Potential obligation disclosed

Rice. 1. Decision tree

Is the property _for sale?_

Is the property used by the owner?

Is the property being created _currently?_

This property is _investment_

Apply Standard "Inventory"

Use basic accounting procedures

use basic accounting procedures

Use the basic accounting treatment (at cost)

Rice. 2. Decision tree for accounting for ownership in accordance with LSRS No. 9

Apply LSFR No. 9

(fair value)

It should be noted that the fair value shown on the balance sheet should reflect the actual market position and condition at the balance sheet date, and not at an earlier or later date. It follows, in particular, that the cost of any future capital expenditure to improve the property and the corresponding expected increase in the level of economic benefits should not be included in fair value at a given date. The Standard requires that an entity that begins measuring its investment property at fair value must continue to measure it the same way, even if such estimates are less reliable.

Interrelation of LSBU with IFRS.

The role of IFRS is growing every year around the world. This is because IFRS are generally accepted accounting and reporting principles. The purpose of IFRS is to coordinate accounting standards in order to minimize national differences in reporting and, on this basis, to ensure the comparability and reliability of information for decision-making by its users.

The standards are not a normative document regulating specific methods of accounting and reporting standards, but are advisory in nature. They enable Latvian specialized organizations to form their accounting policies by choosing specific accounting rules and reporting procedures.

Does not affect the financial statement

Economic differences and differences in the environment determine the difference between reporting systems (for example, in terms of their regulation), in accounting estimates, as well as in the orientation of financial reporting. Together, these elements influence national reporting standards and practices.

For Latvian entrepreneurs, disclosure of information is an important factor, as existing owners are interested in investing in business development. Two groups of firms have appeared in Latvia. The first group consists of companies whose activities are aimed at obtaining funds in the global financial markets, so they began to apply the rules for reporting under IFRS. Another large group are local companies (mostly small and medium-sized) that would like to continue to use national SBUs.

International standards are used by Latvia as a basis for the development of national standards. Allocate the objective advantages of IFRS over national accounting standards (Table 4).

However, the shortcomings of IFRS should also be noted. These include, in particular, the following:

The generalized nature of the standards, providing for diversity in accounting methods;

Lack of detailed instructions, explanations and examples of application of standards to specific situations;

Orientation of IFRS to a developed market economy, which makes it difficult for developing countries to use them;

The application of IFRS cannot be partial, i.e. the reporting must comply with the requirements of each applicable standard.

Latvian accounting legislation allows the preparation of financial statements in accordance with IFRS. This is one of the simplest and most promising ways to disseminate IFRS.

Normative regulation of accounting in Ukraine is represented by five levels (Table 5) and is carried out in order to implement the state policy in the field of accounting, as well as to determine the general directions of the organization, accounting, preparation and reporting.

In accordance with the documents given in table. 5, regulated General requirements to record keeping and reporting, sub-

Table 4

Comparative analysis of IFRS and LAS

IFRS LSBU

Summarize the best knowledge and experience accumulated by accountants from different countries Summarize the knowledge and experience accumulated by accountants in Latvia

In the course of development, the stages of public discussion and “pilot” application are carried out. Developed and approved by the decision of the Accounting Council.

The standards are not “tied” to the peculiarities of accounting regulation in individual countries “Tied” to the peculiarities of accounting regulation in Latvia

Ensure the comparability of accounting documentation between companies on a global scale, as well as being a condition for the availability of accounting information for external users. Ensure the comparability of accounting documentation between Latvian companies. Information available to external users provided by the business register

Allows companies to significantly reduce the costs of preparing consolidated (consolidated) reports Consolidated (consolidated) reports are prepared on the basis of the Law “On Consolidated Annual Reports”

Easy to understand for users of financial information Standards are easy to understand for accountants

Constantly improving The practice of introducing standards does not have a long period (since 2004), so the issue of improvement is not relevant yet

Table 5

Levels of regulatory accounting regulation in Ukraine

Level of regulation, subjects List of documents

First level Supreme Council of Ukraine Economic Code, Civil Code, Code of Labor Laws, Customs Code, Code of Criminal Procedure, Criminal Code, Code of Ukraine on Administrative Offenses; Laws of Ukraine (LU) “On Accounting and Financial Reporting in Ukraine”, “On the Taxation System, “On Taxation of Enterprise Profits”, “On Value Added Tax”, “On Personal Income Tax”, “On Wages” , "On holidays", "On securities and the stock exchange", "On foreign economic activity”, “On the fee for compulsory state pension insurance”

Second level President of Ukraine, Cabinet of Ministers of Ukraine Decree of the Cabinet of Ministers of Ukraine "On the calculation of average wages (income) for the calculation of payments for compulsory state social insurance", decree of the President of Ukraine "On a simplified system of taxation, accounting and reporting"

Third level Ministry of Finance of Ukraine Provisions (standards) of accounting. Chart of accounts for accounting of assets, capital, liabilities and business operations of enterprises and organizations. Instructions on the application of the chart of accounts for accounting of assets, capital, liabilities and business operations of enterprises and organizations. Regulation on documentary support of records in accounting

Fourth level Ministry of Finance, National Bank, State Tax Administration, State Statistics Committee, State Committee for Metrology, Standardization and Certification Instruction of the State Statistics Committee of Ukraine on the statistics of the number of employees. Regulations on conducting cash transactions in the national currency in Ukraine. Instructions for non-cash payments. Guidelines for accounting of fixed assets. State classifier of Ukraine "Classification of fixed assets". Instructions for the inventory of fixed assets, intangible assets, inventory items, cash, documents and calculations. Guidelines for the use of accounting registers. Methodological recommendations for accounting stocks. Guidelines for Accounting for Biological Assets

Fifth level The owner (manager) of the enterprise in cooperation with the accountant Decisions (orders, orders, regulations) regarding the organization and maintenance of accounting at the enterprise

accounting organization projects, accounting documents and registers, duties of the chief accountant, accounting rules for its individual objects, list and correspondence scheme of accounting accounts, etc.

The main accounting regulation document is the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”, which defines the legal principles of regulation, organization, accounting and financial reporting. In particular, the law provides for: 1) state regulation of accounting and financial reporting in order to protect the interests of users, improve accounting and reporting;

2) application of the principles and methods of accounting and financial reporting, which are determined by national accounting regulations (standards) (hereinafter - P (S) BU) and do not contradict IFRS;

3) development by sectoral ministries and other executive authorities of methodological recommendations regarding the application of national P (S) BU, taking into account industry specifics;

Methodological Council for Accounting is an advisory body under the Ministry of Finance of Ukraine, in whose competence

according to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” includes:

Organization of the development and review of draft national P (S) BU, other legal documents related to accounting and financial reporting;

Perfection organizational forms and methods of accounting in Ukraine;

Methodological support for implementation modern technology collection and processing of accounting and economic information;

The general nature of many of the rules and P(S) accounting provides accountants with a wide field for professional judgment and encourages them to make important decisions on their own in problematic accounting situations. The accountant has the right to independently determine the cost limits for recognizing assets as other non-current tangible assets with a simplified system of their depreciation, the use of depreciation methods for tangible and intangible non-current assets, methods for estimating inventories when they are written off, the procedure for forming reserves and funds at the expense of enterprise profits.

With the introduction of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”, the owner of the enterprise, together with the chief accountant, got the opportunity to implement their policy in the field of accounting

Compliance with Ukrainian P

topics of independent choice of accounting methods and procedures, i.e., the formation of an enterprise accounting policy.

National and international accounting and reporting standards

The relevance of harmonization in the field of accounting is determined by the Agreement between Ukraine and the EU, which provides, in particular, for the implementation by Ukraine of measures to adapt legislation in the field of accounting and auditing. Specific measures in this direction are contained in the Action Plan "Ukraine-EU" (21.02.2005), which provides for the need to adapt and ensure the effective implementation of the basic principles that are in line with international rules and standards, as well as EU rules and standards.

The government has adopted relevant resolutions and decisions aimed at the application of IFRS in Ukraine, in particular:

Application since 2003 of IFRS by issuers whose securities are placed on institutionalized stock markets, professional stock market participants, general investment institutions;

Transition of open joint-stock companies to the application of IFRS since 2004-2005.

To implement the Accounting Reform Program using IFRS (Decree of the Government of Ukraine dated October 28, 1998), a comprehensive package of regulatory and methodological accounting framework was approved, including 31 Regulations (standard)

Table 6

BU international standards

P (S) BU 1 "General requirements for financial reporting" Purpose, composition, principles of preparation of financial statements and requirements for the recognition and disclosure of its elements; the time of submission of financial statements to the relevant bodies of the Conceptual framework. Conceptual framework for the preparation and presentation of financial statements1. IAS 1 "Presentation Financial Statements" (MSFZ (IAS) 1 "Presentation of Financial Statements")

P (S) BU 2 "Balance" Content and form of the balance sheet, general requirements for the disclosure of balance sheet items IAS 1 "Presentation Financial Statements" (IFRS (IAS) 1 "Presentation of Financial Statements")

P (S) BU 3 "Report on financial results" Content and form of the report on financial results, general requirements for disclosure of report items, determination of profit (loss) for the reporting period

Continuation of the table. 6

Ukrainian standard Summary of the standard Analogue of the international standard

P (C) BU 4 “Cash Flow Statement” Content and form of the cash flow statement, general requirements for disclosure of its items, cash flow as a result of operating, investing and financial activities IAS 7 “Cash Flow Statements” (IFRS ( IAS) 7 Cash Flow Statements)

P (C) BU 5 "Statement of Equity" Content and form of the cash flow statement, general requirements for disclosure of its items, cash flow as a result of operating, investing and financial activities

P (S) BU 6 “Correction of errors and changes in financial statements” Procedure for correcting errors and changes in accounting estimates, changes in accounting policies, events after the balance sheet date (list of events) and ways to adjust assets and liabilities IAS 8 “Accounting Policies, Changes inAc-counting Estimates and Errors” (IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”). IAS 10 "EventsAfter Balance Sheet Date" (IFRS (IAS) 10 "Events after the balance sheet date")

I (C) BU 7 "Fixed Assets" Principles for the formation of accounting information on fixed assets and other non-current tangible assets, disclosure of information about them in financial statements, recognition, valuation, revaluation, depreciation; disposal of property, plant and equipment IAS 16 Property, Plant and Equipment (IAS 16 Property, Plant and Equipment)

I (C) BU 8 “Intangible Assets” Principles for the formation of information on intangible assets in accounting, recognition and evaluation, revaluation, amortization, depreciation of intangible assets, disposal of intangible assets IAS 38 “Intangible Assets” (IAS 38 “Intangible assets")

I (C) BU 9 Inventories Principles for the formation of information about reserves in accounting and its disclosure in financial statements, recognition and initial measurement of inventories, valuation of inventories on disposal IAS 2 Inventories (IAS 2 Inventories)

I (C) BU 10 “Accounts Receivable” Principles for the formation of information on receivables in accounting, recognition and valuation of receivables, current receivables, allowance for doubtful debts IAS 39 “Financial Instruments: Recognition and Measurement see also” (IAS) 39 "Financial Instruments: Recognition and Valuation")

I (C) BU 11 “Liabilities” Methodological principles for the formation of information on liabilities in accounting and its disclosure in the financial statements

I (C) BU 12 “Financial Investments” Principles for the formation of information on financial investments in accounting, its disclosure in financial statements; assessment of financial investments as of the balance sheet date, accounting for financial investments in associates and subsidiaries; accounting for financial investments for joint ventures IAS 28 Investments in Associates (IAS 28 Investments in Associates). IAS 31 Interests in Joint Ventures (IAS 31 Financial Statements of Interests in Joint Ventures)

Continuation of the table. 6

Ukrainian standard Summary of the standard Analogue of the international standard

P (C) BU 13 "Financial Instruments" Principles of formation of information on financial instruments in accounting; their recognition and measurement IAS 32 Financial Instruments: Disclosure and Presentation (IAS 32 Financial Instruments: Disclosure and Presentation). IAS 39 Financial Instruments: Recognition and Measurement see also (IAS 39 Financial Instruments: Recognition and Measurement). IFRS 7 Financial Instruments: Disclosures (IFRS 7 Financial Instruments: Disclosures)

P (S) BU 14 "Rent" Methodological foundations formation in accounting information on the lease of non-current assets and its disclosure in the financial statements IAS 17 “Leases” (IFRS (IAS) 17 “Leases”)

P (S) BU 15 “Income” Recognition and classification of income, assessment of income, principles for the formation in accounting of information on income from ordinary and extraordinary activities and its disclosure in the financial statements IAS 18 “Revenue” (IFRS (IAS) 18 “Income” )

P (C) BU 16 "Expenses" Principles of formation in accounting of information on the expenses of the enterprise and its disclosure in the financial statements; expense recognition, composition of expenses IAS 23 Borrowing Costs (IAS 23 Borrowing Costs)

П(С) BU 17 "Income Tax" (IAS) 12 Income Taxes)

P (S) BU 18 "Construction Contracts" Principles for the formation of accounting information regarding construction contracts, recognition and evaluation of income and expenses under construction contracts IAS 11 "Construction Contracts" (IAS 11 "Construction Contracts")

P (S) BU 19 “Business Combinations” The procedure for displaying in accounting and reporting the acquisition of other enterprises, goodwill arising from the acquisition, merger of enterprises, as well as disclosure of information on business combinations, accounting for the acquisition; business combination accounting IFRS 3 Business Combinations (IFRS 3 Business Combinations)

P (C) BU 20 “Consolidated Financial Statements” The procedure for preparing consolidated financial statements; general disclosure requirements for the preparation of consolidated financial statements in the notes to the statements; conditions for non-provision of consolidated financial statements IAS 27 “Consolidated and Separate Financial Statements” (IAS 27 “Consolidated and separate financial statements”)

P (C) BU 21 "The impact of changes in foreign exchange rates" Methodological bases for the formation in accounting of information on transactions in foreign currency and the display of indicators of financial statements of business units outside Ukraine in the monetary unit of Ukraine IAS 21 "Effects Changes in Foreign Rates" (IFRS (IAS) 21 "The Effects of Changes in Foreign Exchange Rates")

Continuation of the table. 6

Ukrainian standard Summary of the standard Analogue of the international standard

P (S) BU 22 "The Impact of Inflation" The procedure for adjusting public financial statements due to inflation IAS 29 "Financial Reporting in Hyperinflationary Economies" (IAS 29 "Financial Reporting in Hyperinflationary Economies")

P (S) BU 23 “Related Party Disclosures” Methodological principles for the formation of information about related party transactions and their disclosure in financial statements IAS 24 “Related Party Disclosures” (IAS 24 “Related Party Disclosures”)

P (S) BU 24 "Earnings per share" Methodological principles for the formation of information in accounting on net income per ordinary share IAS 33 "Earnings per Share" (IFRS (IAS) 33 "Earnings per share")

P (C) BU 25 "Financial Report of Small Business Entities" Content and form of financial statements of SMP - Balance (form No. 1st) and income statement (form No. 2nd). The procedure for filling out report items, elements of operating expenses No analogue

P (S) BU 26 “Payments to employees” Methodological principles for the formation in accounting of information on payments (in monetary and non-monetary forms) for work performed by employees, and its disclosure in the financial statements IAS 24 “Related Party Disclosures” (IFRS (IAS ) 24 “Related Party Disclosures”). IAS 19 Employee Benefits (IAS 19 Employee Benefits). IAS 26 Accounting and Reporting Retirement Benefit Plans (IAS 26 Accounting and Reporting Retirement Benefit Plans)

P (C) BU 27 “Non-current assets held for sale and discontinuing operations” Methodological principles for the formation in accounting of information about activities that are terminated and its disclosure in the financial statements IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations » (IFRS 5 Non-current Assets Held for Sale and Discontinued Operations)

P (S) BU 28 "Impairment of Assets" Methodological principles for the formation in accounting of information on the decrease in the usefulness of assets and its disclosure in the financial statements IAS 36 "Impairment Assets" (IFRS (IAS) 36 "Impairment of Assets")

P (S) BU 29 "Financial reporting by segments" The procedure for the formation of information on income, expenses, financial results, assets and liabilities of reportable segments and its disclosure in the financial statements IFRS 8 "Operating Segments" (IFRS 8 "Operating Segments" )

P (S) BU 30 "Biological Assets" Methodological principles for the formation of information on financial expenses in accounting and its disclosure in the financial statements IAS 41 "Agriculture" (IFRS (IAS) 41 "Agriculture")

P (C) BU 31 "Financial expenses" Methodological principles for the formation of information on financial expenses in accounting and its disclosure in the financial statements IAS 23 "Borrowing Costs" (IAS 23 "Borrowing Costs")

P (S) BU 32 Investment Property

No analogue IAS 20 Accounting for Government Grants and Disclosure Government Assistance (IAS 20 Accounting for Government Grants and Disclosure of Government Assistance)

Also IAS 30 “Disclosures in Financial Statements Banks and Similar Financial Institutions” (IAS 30 “Disclosures in the Financial Statements of Banks and Similar Institutions”)

» IAS 34 Interim Financial Reporting (IAS 34 Interim Financial Reporting)

The end of the table. 6

Ukrainian standard Summary of the standard Analogue of the international standard

» IFRS 1 First-time Adoption International Financial Reporting Standards (IFRS 1 First-Time Adoption of IFRS)

» IFRS 2 Share-based Payment

» IFRS 4 Insurance Contracts (IFRS 4 Insurance Contracts)

» IFRS 6 Exploration for and Evaluation Mineral Resources (IFRS 6 Exploration for and Evaluation of Mineral Resources)

1 Not a financial reporting standard.

accounting based on international standards (Table 6).

All standards provide for the disclosure of information about accounting items in the Notes to the annual financial statements,

which, with indicators in numerical (total) terms, are included in the annual financial statements No. 5 “Notes to the annual financial statements”, No. 6 “Financial statements by segments”.

(To be continued)

Organizational and legal forms of entrepreneurship

Accounting (accounting) often referred to as "the language of business" ("language of business"). Like any language, accounting is constantly evolving and changing to meet the needs of society. According to the definition provided by the American Institute of Chartered Public Accountants, the term accounting means "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof" (the art of recording, classifying and summarizing in monetary terms transactions and events that are to a certain extent of a financial nature, and interpreting the results obtained).

In foreign countries, there are various organizational and legal forms of entrepreneurship, but the main ones are three types that differ in the number of capital owners, their rights and obligations. In the USA they are called: sole proprietorship, partnership, corporation. And in the UK it is: sole traders, partnership, limited company(Fig. 1.1).

Rice. 1.1. in

Sole proprietorship (sole proprietorship) - This is a company that was created by one person, which makes it possible for the owner to control its economic activities. A sole proprietorship is not a legal entity, and therefore the profit of a sole proprietorship is treated as the personal income of its owner. Hence, it is not subject to income tax, but is subject to personal income tax. Since personal income tax rates and tax bases tend to be higher than corporate income tax rates, this is a disadvantage of sole proprietorships.

The liability of the owner of sole proprietorship is unlimited, and therefore, in the event of bankruptcy, he may lose not only the enterprise, but also his own property.

In the USA according to Uniform Partnership Act (Uniform Partnership Act), adopted in 1914 and in force in 44 of the 50 states, partnership(partnership, partnership) defined as "associations of two or more persons to carry on business as co-owners for profit". In the UK according to Partnership Act 1890 partnership is defined as "the relationship of individuals who jointly conduct business for profit." Partners can be both individuals and legal entities, the total number of which is not limited.

partnerships have limited lifetime (limited period of activity), that is, in cases where one of the partners refuses, becomes bankrupt, or is unable to continue to participate in the activities of the partnership, it requires re-registration.

as a result mutual agency (common representation) each partner is a full representative of the partnership and can enter into business transactions from the entire partnership within the framework of the main activity. Each partner has the right to participate in the company's profits. A partnership, like a sole proprietorship, is not a legal entity and therefore taxes are levied on the individual income of each partner.

Rice. 1.2. in

The main feature of general partnerships is unlimited liability (unlimited liability). That is, if the partnership goes bankrupt, each partner is obliged to assume full responsibility for the debts of the enterprise, even if these debts are more than the capital of the partnership. At the same time, if one of the partners cannot pay his part of the debt, the other partner must do this for him by selling his own property. But even in limited partnerships, there must be at least one person who bears full responsibility. Her name is general partner (main partner), and this is usually the partner who manages the affairs of the partnership. Other partners who are only liable to the extent of their investments are called limited partners (limited partners).

Since partnerships allow the pooling of capitals and talents of individuals, the most common are societies created on a professional basis, for example, societies of accountants, lawyers, doctors.

The main features of corporations, as opposed to partnerships, are perpetual lifetime (unlimited period of activity) and limited liability (limited liability of its owners). Corporate legislation in different countries is too extensive, and the definition of a corporation is very vague. Thus, in the United States, at the federal level, to regulate the procedure for the creation and functioning of corporations, there are Revised Model Nonprofit Corporation Act (Amended Model Nonprofit Corporation Law) and Revised Model Business Corporation Act (Amended Model Business Corporations Act) Whereby corporation (corporation) characterized as an economic unit that issues shares.

share (stock) - this is a security without a fixed circulation period, which certifies the equity participation of a person in the capital of the company and gives him the right to receive part of the profit in the form of dividends (dividend) and participation in the management of the corporation and the distribution of its property in the event of liquidation. Shareholders (owners of shares) can be individuals and legal entities.

In the process of registering a corporation, the draft charter specifies the maximum number of shares that it will be allowed to issue - authorized shares (shares allowed for release). As a rule, at the time of formation, a corporation produces a smaller number of them - issued shares (issued shares) so as to unissued shares (unissued shares) issue in case the corporation decides to expand its operations. Therefore, the number of shares that are issued and outstanding outstanding shares (circulating shares) less than the number allowed for release.

Shares can be par value shares (shares with par value) or no-par stock (non-nominal shares). Non-par shares may be issued from stated value (declared value) - when the board of directors sets their value at any time) and no-stated value (no declared value).

In some cases, in order to increase earnings per circulating share, a corporation buys back a portion of the shares that have been issued. Such shares are called treasury shares (redeemed shares). The difference between repurchased shares and non-issues is that the repurchase of repurchased shares is allowed at a price below the nominal value (Fig. 1.3).

Rice. 1.3. in

American corporations are required to include one of the following words or its abbreviation in their corporate names: "corporation" or "corp. ";"incorporated" or "inc.";"company" or "co. ";"limited" or "ltd."

Depending on the way the shares are sold, in the USA a corporation receives the status of open or closed (Fig. 1.4). Stock general corporation (open corporation) freely traded on stock exchanges close corporation (closed corporation) do not circulate on stock exchanges and belong to a narrow circle of shareholders.

Fig.1.4. in

The difference between corporations and sole proprietorships and partnerships is that a corporation is a legal entity, and therefore its income is subject to double (or triple) taxation: the first time - by federal income tax; the second time - state income tax; the third time - tax on dividends. However, after the tax reform in the United States since 1986, the concept of small corporation(S-Corporation) - small corporation, which, like partnerships, is devoid of taxation of profits. Getting a status S Corporation possible if the conditions are met: the corporation is American, issues one type of shares and has no more than 35 shareholders, who must, as a rule, be private individuals resident in the United States. All other corporations can issue two main types of shares, each of which has its own specifics (Fig. 1.5).

Ordinary shares (ordinary shares), or c common stock (common shares) grant their holders the right to vote in the management of the company by electing board of directors (board of directors) and receive dividends in proportion to their number.

Preferred shares (preferred shares) do not have the right to vote, but give their owners an advantage in receiving dividends and distributing property upon liquidation of the corporation. The amount of dividends on preferred shares is set as a percentage of their nominal value or in dollars per share. Quite often, such shares are distributed among employees of the corporation on preferential terms. If preference shares are entitled to be exchanged for ordinary shares, they are called convertible preferred shares (convertible preferred shares). Otherwise, preferred shares are nonconvertible shares (non-convertible shares).

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Ownership of both ordinary and preferred shares does not guarantee the receipt of dividends, which are declared by the board of directors. So, if no dividends were declared in the current year, then they are deposited next year only if there is an agreement between the shareholders and the corporation that the shares are cumulative preferred shares (cumulative preferred shares). In all other cases - if the shares are ordinary or noncumulative preferred shares (non-cumulative preference shares), shareholders will never receive dividends for that year.

Corporations often buy shares of other corporations for the purpose of receiving dividends or influencing their operating and financial policies. Depending on the share of shares acquired by the investor company, the size of its influence on the invested company is determined.

According to international practice for obtaining significant influence (significant influence) per invested enterprise, the investor must own from 20 to 50% of the ordinary shares of the invested enterprise, and to receive full control (control) - more than 50% of the ordinary shares of the investee, i.e. a controlling stake. So, for example, a trading corporation can buy controlling stakes in companies that produce goods in order to be sure that it will receive required amount goods of the required quality at a price that it will fix.

An investor company can acquire a controlling interest in another corporation either by creating a new corporation, keeping more than 50% of the shares (or even all 100%), or by acquiring more than 50% of the shares of a corporation that already exists. Both methods of obtaining a controlling stake are quite common. The acquisition of a controlling interest in a corporation that already exists can occur through a takeover or merger.

Acquisitions occurs when a controlling interest in another company is obtained by acquiring it with money, other assets, or debt.

Mergers (mergers) occurs when a controlling interest in another company is obtained by exchanging it for its own shares. In this case, both corporations become each other's shareholders.

However, a partnership can also be an investee if another company owns part of its capital. According to IAS 27 and IAS 28 the following terms and their meanings are used to designate enterprises that are in such a relationship:

associated company(associated company) is an entity, including an entity that is not a corporation, such as a partnership in which the investor has significant influence and is neither a subsidiary nor an interest in a joint venture;

subsidiary company(subsidiary) is an entity, in particular an unincorporated entity, such as a partnership, that is controlled by another entity (known as a parent);

parent company(parent company)- a business entity that has one or more subsidiaries.

For various reasons and different ways businesses form associations. But if the previously common forms of enterprise associations were cartels, syndicates, trusts, associations, concerns, consortiums, then in recent decades, the following have become widespread:

groups(groups)- the totality of the parent company and all its subsidiaries;

holding(holdings)- the aggregate of the parent company and all its subsidiaries and associates.

A type of holding is conglomerate (conglomerates), which arise as a result of the absorption by one large company of many small and medium-sized companies of various industries and fields of activity that are not related to each other either by industry or by technology. The purpose of their creation is to invest in the most profitable areas and maximize profits.

By structure, holdings can be either simple, if they consist of a parent company and one or more subsidiaries and associates, or complex, if subsidiaries also act as parent companies in relation to other companies. Such a multi-stage nature, that is, the presence of subsidiaries and grandchildren, is a characteristic feature of modern holdings. The main company that is at the head of the holding is called holding company (holding company).

The international associations of enterprises created according to the holding structure acquired the greatest importance. Such associations are called multinational company- MNC (multinational companies), multinational corporations- MNC (multinational corporations), transnational corporations- TNCs (transnational corporations), multinational enterprises- MNE (multinational enterprises) and even corporations worldwide(worldwide corporations).

According to the existing UN methodology, to TNC subordinate foreign enterprises are considered not only subsidiaries, but also associated companies, which include corporations in which from 10 to 50% of the share capital belongs to a foreign investor.

Rapid development international business pursues such goals as gaining access to new sources of resources and new markets, obtaining competitive advantages, and increasing efficiency. To MNC include not only manufacturing companies, but also transnational banks, telecommunications and audit companies, investment and pension funds. By structure MNC distinguish between vertically oriented and horizontally oriented. The first ones are MNC, who produce goods in some countries, and supply to others, and the second includes MNC, who produce similar goods in different countries.

American magazine data "fortune" which annually publishes a list of the 500 largest private and public corporations in terms of gross income, indicate that the largest corporations in the world are multinational (Table 1.1).

Table 1.1. in Ten largest corporations from the listFortune for 2011