Економіка: облік та аудит
Accounting Standards and its
Types
Educational
and Research Institute of Economics and Management, NUFT
Kate Lauta, Irina Velichko
The integration of Ukraine into the European environment requires a
corresponding change in accounting practice. Іt is known that one of the main
normative documents that guide the accountants of Ukrainian enterprises, are
the Ukrainian Accounting Standards (UAS). Currently, the global accounting
practice is based on the International financial reporting standards (IFRS). Nowadays
a lot of Ukrainian enterprises get acquainted with the International financial
reporting standards more detailed. Simultaneously, when you start accounting
under the new rules it is usually easier if they already comparable with known
and proven one. In Ukraine there are enterprises of different industries and
forms of ownership, size and scope of activities, but the accountants of these
enterprises share a common fact: this is the existence of fixed assets that
require competent accounting.
The question of fixed assets is discussed in IAS 16 "Fixed
assets" in the International Standards of Accounting and Reporting. The
purpose of accounting is to define the approach to fixed asset accounting to
ensure the clarity of information about the enterprise's investments in fixed
assets and the changes in such investment. Methodological bases of formation of
accounting information about fixed assets, and disclosure of information in the
financial statements set out in UAS 7 "Fixed Assets". General rules
of fixed assets accounting are very similar according to the international and
national standards, but at the same time between them there are some differences
that should be considered in the process of accounting according to IFRS.
Analyzing international and national accounting standards of fixed
assets, there are differences in the formation of the original value of fixed
assets arising from various events. Thus, the account of expenses on payment of interest
is subject to acquisition of fixed assets on credit according to international
standards according to the requirements of IFRS 23 "Borrowing Costs",
depending on whether the object is a qualified asset as well as the terms of
payment of such interest. Paragraphs 8 and 11 of UAS 7 does not include
expenses for payment of percent on the credits in initial value of the object.
If fixed assets acquired through grants in accordance with IAS 16, the
carrying amount of the asset may be reduced by the amount of received state
grants, if such financing is related to the acquisition of this object, whereas
the decrease in the value of the asset is not allowed as national standards. If
the company is calculated with equity instruments for received fixed assets
accounting according to IFRS 16, such operation is reflected in the debit
account of the respective assets and credited to share capital. National
standards do not provide any method to account for transactions involving
equity instruments.
The process of revaluation asset accounting is an important direction in
which international and national standards do not contain significant
differences, but the UAS 7 have specified limit (over 10%), in which is necessary
to reassess. Such limit also provided by international standards, but it is
defined as one that is "significantly different" from the carrying
amount.
National and international standards contain some differences in the
method of depreciation. Methods of depreciation according to UAS and IFRS are
straightforward and productive. Nevertheless, UAS provide three methods:
reducing the residual value, the accelerated reduction of the residual value,
cumulative method and IFRS include declining balance method. It is stated in international
standards that the important thing is that the applied method reflected the
scheme by which the enterprise consumes the economic benefit derived from the
asset. According to UAS 7 the cost of land is not depreciated, whereas IFRS 16
contain a provisions stating that "in some cases, the land itself may have
a limited useful life, then it has to amortize method, which reflects the
benefits derived from it." Thus, it is possible to observe a number of
similarities have studied in details the provisions contained in IFRS 16 and
UAS 7 on the basis of comparative characteristics. However, among these
regulations, there are significant differences, since the international
standards do not take into account national specifics of accounting.
Therefore, on the basis of comparative characteristics of IFRS 16 and
UAS 7, we can say that these normative documents, along with the identical,
contain excellent provisions. In addition, these documents must provide users
with information regarding changes in the composition of fixed assets during
the period and disclosure of balances at the reporting date, therefore, they
must not contradict each other.
Of course, the owners’ responsibility is deciding to apply international
standards for accounting or follow national. But because IFRS absorb the
positive experience of many countries, in our opinion, it would be appropriate
to begin to improve national standards, or to provide international standards
of national status. This will facilitate the work of accountants, companies that
deal with foreign partners, and improve the country's image.
References:
1. International accounting standard 16 «Fixed assets».
2. Ukrainian Accounting Standards 7 «Fixed assets»: approved by the
Ministry of Finance of Ukraine № 92 of 27.04.2000;
3. Жолнер І. Фінансовий облік за
міжнародними стандартами: навчальний посібник/ І. Жолнер. – К.: Центр учбової
літератури, 2012.
4. Попович В.
Облік основних засобів: порівняльний аналіз МСБО та П(С)БО. Режим доступу: http://www.nbuv.gov.ua/old_jrn/natural/Vnulp/Menegment/2012_721/41.pdf
Scientific supervisor: L.
Vlasenko.