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Preparation of financial statements under International Financial Reporting Standards (IFRS)
Russian legislation provides for the mandatory compilation of financial statements under IFRS by the following companies (Article 2 of the Federal Law of the Russian Federation "On Consolidated Financial Statements" No. 208-FZ of July 27, 2010):
For the preparation of financial statements under IFRS, companies usually use one of two methods:
In this case, the most common way is to transform the reporting prepared under Russian Accounting Standards (RAS).
Transformation of reporting
Transformation of the reporting is carried out after the end of the reporting period and represents a clear sequence of necessary and sufficient operations to bring accounting (financial) statements, compiled under RAS, into the format of IFRS.
Transformation of RAS accounts usually includes the following stages:
Parallel record keeping
The main advantages of parallel accounting are the correctness, reliability and speed of data preparation. IFRS reporting is carried out almost simultaneously with the formation of similar reports, the registration of transactions under RAS. Thus the information can be compared, that raises its accuracy.
At the same time, the implementation of parallel accounting requires the use of advanced information technologies, the availability of a developed IT infrastructure and a certain staff of specialists. It takes considerable money and time to develop and implement a specialized information ERP system, training its users, and technical support. Increased costs for the maintenance of specialized personnel.
Consolidation of reporting
Consolidation includes the transformation of the reporting of each individual company in the group, as well as a number of additional procedures: