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Russia may delay move toward adopting IFRSs

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07 Apr 2005

On 1 November 2004, we reported that the Russian Duma (parliament) had given preliminary approval to a bill requiring corporations with more than one subsidiary to publish financial statements that conform to IFRSs starting either in 2004 or 2005.

We noted that two additional votes of the Duma were required before the bill would become law.

It now appears that the legislation is stalled in the Duma. A news story in Vedomosti (Russia's top business newspaper, a joint venture of the Financial Times and Wall Street Journal) on 2 February 2005 was titled 'IFRS to be Adjourned' and stated that "the effort has come to a standstill". A few weeks later (22 February 2005), an editorial in Vedomosti said that neither the business community nor government is ready for transition to IFRS because "there are no incentives for transparency and there are technical difficulties for implementation that may cause chaos in the reporting rather than increase investment attraction". The editorial also questioned the quality of current IFRS implementation by Russian banks, which have been required to use IFRSs since third quarter 2004.

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