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.
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.