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