Russian GAAP Update

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17 May 2001

The Russian Federation's move to a market economy has necessitated a change in the standards of accounting for reporting the financial position and results of operations of Russian enterprises.

The Ministry of Finance of the Russian Federation has responsibility for instituting reform to Russian Accounting Standards (RAS) applicable for all organisations, except those that are required to report to the Central Bank of the Russian Federation.

Beginning in 1995, but mostly since 1998, the Ministry of Finance instituted revisions in an effort to account for transactions under more internationally accepted methods. For example, accounting for revenue under the accrual method has been introduced and accruing expenses incurred but not paid is now required in certain situations. Specifically, 14 provisions on accounting (termed PBU) have been issued. These PBUs include:

  • Accounting Policy (PBU 1/1998)
  • Accounting for Construction Contracts (PBU 2/1998)
  • Accounting for Assets and Liabilities Denominated in Foreign Currency (PBU 3/2000)
  • Financial Statements (PBU 4/1999)
  • Accounting for Inventory (PBU 5/1998)
  • Accounting for Property, Plant and Equipment (PBU 6/1997)
  • Post-Balance Sheet Events (PBU 7/1998)
  • Contingencies (PBU 8/1998)
  • Incomes of an Enterprise (PBU 9/1999)
  • Expenses of an Enterprise (PBU 10/1999)
  • Related Party Disclosures (PBU 11/2000)
  • Segment Information (PBU 12/2000)
  • Accounting for Government Assistance (PBU 13/2000)
  • Accounting for Intangible Assets (PBU 14/2000)

However, even with the issuance of these accounting policies, fundamental differences still remain with internationally accepted methods. While the PBUs may be similar to IAS, important differences still exist. In addition, differences still exist with respect to wholly owned subsidiaries as, under RAS, a subsidiary company does not have to be consolidated.

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