RS Brief news IFRS in Action

IFRS in Action

The Russian Ministry of Finance has completed the publication of the official translations of all of the 37 international financial reporting standards (IFRS) into Russian, along with the 26 accompanying comments, which altogether become mandatory for the vast majority of Russia’s large companies, on its website. All the rules and regulations previously introduced by the Ministry of Finance for the purposes of the IFRS application in the territory of Russia hereby lose their force.

Beginning with 2012, the IFRS become mandatory not only for operating banks in Russia which widely applied them before as well, but also for insurance companies, and for approximately 400 public companies whose securities аre traded on exchanging markets. The scope of application of the IFRS is constantly growing, with public pension funds and investment funds, enterprises with considerable state or foreign capital participation, claims the director of the Ministry of Finance's department for state financial control Leonid Shneidman. In January the text of the IFRS was published on the official website of the Russian Ministry of Finance for public discussion, meaning discussion by all governmental and municipal authorities, state-financed institutions, state academies of sciences, extra-budgetary funds.

The Ministry of Finance acknowledges that the transition to the IFRS will require “quite a bit of work in conversion and restructuring of their reporting systems” to be done on the part of many companies and businesses. No estimates have been made as to what costs this would run to for the business sector, Shneidman confessed in his interview to Russian Survey.

The IFRS will only be applicable to consolidated groups. The accountability of some legal entities will continue to follow the Russian accounting standards, which, however, are also going to be brought closer to with the international requirements. A relevant law was adopted at the end of 2011 and will take effect beginning with January 1, 2013.

Andrei Susarov,
Tax columnist for the Moscow news
Exclusively for Russian Survey RS