IFRSs and the accounting environment in Russia

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15 Oct 2009

Deloitte & Touche Regional Consulting Services Limited (Russia) has published Doing Business in Russia 2009.

A section of that report examines the accounting environment in Russia. For historical reasons, the Russian financial reporting has been determined by the state rather than the accounting profession. Russian Accounting Standards (RAS) tend to be a summarised version of IFRSs, with modifications and options that allow the financial statements to be consistent with tax laws and regulations. Doing Business in Russia 2009 includes information about which entities are required to be audited, where financial statements are filed, and recent trends toward voluntary publication of IFRS financial statements. Some differences between IFRSs and Russian Accounting Standards are noted – as summarised below. Here is our Russian Country Page.

Differences between Russian Accounting Standards and IFRSs

The practical application of RAS results in some significant differences compared to IFRSs, in particular, the following:

  • Financial statements are generally prepared on a historical cost basis with only limited use of revaluations
  • The fair value concept is not widely applied, except for investments in market traded securities
  • Finance leases may be capitalised,but usually are not
  • Assets are not normally tested for impairment (except for intangible assets)
  • The useful lives of fixed assets tend to be in line with the useful lives specified for tax purposes
  • The assets and liabilities of an entity which has been acquired are measured and maintained at book value at the date of acquisition
  • Goodwill on acquisition (positive and negative) is amortised over the shorter of 20 years or the life of the acquirer and is generally not subject to an annual impairment test
  • Provisions (such as for bad debts) are generally not created
  • Revenue or expenditure is only recognised after all the preceding primary documentation supporting the transaction has been received, in accordance with the tax rules
  • Deferred tax is generally calculated using the income statement method, although the methodology differs
  • There is no direct requirement to prepare consolidated accounts

Click to view Doing Business in Russia 2009 (PDF 2,330k, 80 pages).

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