With this Order the Ministry of Finance has amended some effective National Accounting Standards (NAS), the Instruction on the Application of Chart of Accounting of Assets, Capital, Liabilities and Economic Operations of Enterprises and Organizations (hereinafter referred to as “Instruction No. 291”) and the Chart of Accounts approved by Order of the Ministry of Finance of Ukraine No. 291 of November 30, 1999.
The preconditions for the changes lie, first of all, in bringing into effect, starting on January 01, 2008, of NAS 32 “Investment property” and updated version of NAS 27 “Non-current assets held for sale and discontinued operations".
From now on, taking into consideration changes incorporated with this Order to Item 3 of NAS 7 “Fixed assets”, the Ministry of Finance has unambiguously underlined that investment property and fixed assets held for sale are not the fixed assets as understood for the purposes of NAS 7, but instead being separate objects of accounting regulated by special standards.
In addition, NAS 8 “Intangible assets” has also undergone changes. Henceforth, a right of permanent use of a land site belongs to one of the groups of intangible assets (this asset was earlier referred to the balance sheet item “Fixed assets”).
Changes have been accordingly incorporated to NAS 2 “Balance sheet” and NAS 3 “Income statement”. Besides, some changes have been made to NAS 11 “Liabilities”, NAS 25 “Financial reporting of a small business entity” and NAS 27 “Non-current assets held for sale and discontinued operations".
Thus, in compliance with the supplements incorporated to NAS 2, “Balance sheet” the value of assets that are referred to as investment property, has to be disclosed in the disclosing rows 055 — 057 of the balance sheet:
Row 055 “Fair (book) value of the investment property” gives fair value of the investment property recorded at fair value and investment property recorded at book value calculated as difference between original cost (row 056) and accumulated depreciation (row 057). The amount in row 055 is included into the balance sheet total.
The value of non-current assets and disposal groups held for sale accounting of which is regulated by NAS 27, from now on should be disclosed in the new section of the assets part of the balance sheet "IV. Non-current assets and groups for disposal” in disclosing row 275.
In accordance with the changes incorporated to NAS 3 “Income statement”, profit or loss from the discontinued operations after taxation and/or profit or loss from the revaluation of non-current assets and groups for disposal that create discontinued operations are valued based on net realizable value and determined in compliance with NAS 27 “Non-current assets held for sale and discontinued operations” should be disclosed in disclosing (new) row 176 or 177.
At the same time, relevant changes have been incorporated to the Chart of Accounts. Specifically, a list of subaccounts has been supplemented:
1) account 10 “Fixed assets” — with subaccount 100 “Investment property” that should be used to account for the objects of investment property and their movement;
2) account 13 “Depreciation (amortization) of non-current assets” — with subaccount 135 “Depreciation of investment property”;
3) account 28 “Goods” — with subaccount 286 “Non-current assets and groups for disposal held for sale”.
Besides, the Ministry of Finance has amended the Instruction on Stocktaking of Fixed Assets, Intangible Assets, Retail Goods, Cash Assets, Documents and Settlements approved by Order of Ministry of Finance of Ukraine No. 69 of August 11, 1994.
At the moment the financial reporting forms have remained unchanged.
The Order comes into effect starting from March 30, 2008.
With this Order the Ministry of Finance has amended some effective National Accounting Standards (NAS), the Instruction on the Application of Chart of Accounting of Assets, Capital, Liabilities and Economic Operations of Enterprises and Organizations (hereinafter referred to as “Instruction No. 291”) and the Chart of Accounts approved by Order of the Ministry of Finance of Ukraine No. 291 of November 30, 1999.
The preconditions for the changes lie, first of all, in bringing into effect, starting on January 01, 2008, of NAS 32 “Investment property” and updated version of NAS 27 “Non-current assets held for sale and discontinued operations".
From now on, taking into consideration changes incorporated with this Order to Item 3 of NAS 7 “Fixed assets”, the Ministry of Finance has unambiguously underlined that investment property and fixed assets held for sale are not the fixed assets as understood for the purposes of NAS 7, but instead being separate objects of accounting regulated by special standards.
In addition, NAS 8 “Intangible assets” has also undergone changes. Henceforth, a right of permanent use of a land site belongs to one of the groups of intangible assets (this asset was earlier referred to the balance sheet item “Fixed assets”).
Changes have been accordingly incorporated to NAS 2 “Balance sheet” and NAS 3 “Income statement”. Besides, some changes have been made to NAS 11 “Liabilities”, NAS 25 “Financial reporting of a small business entity” and NAS 27 “Non-current assets held for sale and discontinued operations".
Thus, in compliance with the supplements incorporated to NAS 2, “Balance sheet” the value of assets that are referred to as investment property, has to be disclosed in the disclosing rows 055 — 057 of the balance sheet:
Row 055 “Fair (book) value of the investment property” gives fair value of the investment property recorded at fair value and investment property recorded at book value calculated as difference between original cost (row 056) and accumulated depreciation (row 057). The amount in row 055 is included into the balance sheet total.
The value of non-current assets and disposal groups held for sale accounting of which is regulated by NAS 27, from now on should be disclosed in the new section of the assets part of the balance sheet "IV. Non-current assets and groups for disposal” in disclosing row 275.
In accordance with the changes incorporated to NAS 3 “Income statement”, profit or loss from the discontinued operations after taxation and/or profit or loss from the revaluation of non-current assets and groups for disposal that create discontinued operations are valued based on net realizable value and determined in compliance with NAS 27 “Non-current assets held for sale and discontinued operations” should be disclosed in disclosing (new) row 176 or 177.
At the same time, relevant changes have been incorporated to the Chart of Accounts. Specifically, a list of subaccounts has been supplemented:
1) account 10 “Fixed assets” — with subaccount 100 “Investment property” that should be used to account for the objects of investment property and their movement;
2) account 13 “Depreciation (amortization) of non-current assets” — with subaccount 135 “Depreciation of investment property”;
3) account 28 “Goods” — with subaccount 286 “Non-current assets and groups for disposal held for sale”.
Besides, the Ministry of Finance has amended the Instruction on Stocktaking of Fixed Assets, Intangible Assets, Retail Goods, Cash Assets, Documents and Settlements approved by Order of Ministry of Finance of Ukraine No. 69 of August 11, 1994.
At the moment the financial reporting forms have remained unchanged.
The Order comes into effect starting from March 30, 2008.