Annual reporting according to IFRS. International Financial Reporting Standards - overview

IFRS reporting forms: What is it?

Basic earnings per share

Basic earnings per share(English: "basic earnings per share") shows the share of each ordinary share in the company's financial results for a certain period. The calculation of basic earnings is governed by IAS 33 Earnings per Share. This standard is applied by companies whose shares are listed on stock exchanges and companies that issue shares for free circulation.

Consolidated financial statements

Consolidated financial statements are statements in which the income, expenses, assets and liabilities of the parent and its controlled entities are presented as the income, expenses, assets and liabilities of a single entity.

Separate financial statements

Separate financial statements are those in which investments in associates and joint ventures are reported without using the equity method (in the statement of financial position - at cost, amortization or fair value; in the statement of comprehensive income - as a single line item (gain or loss on investment )).

Statement of cash flows

Statement of cash flows is a document that reflects the inflow and outflow of cash and cash equivalents for the reporting period. The preparation and presentation of the cash flow statement is governed by the same IFRS (IAS) 7.

Statement of financial position

A statement of financial position is a document that reflects the value of an enterprise's assets, liabilities and equity at the reporting dates.

Statement of changes in equity

A statement of changes in equity is a document that reflects the value of each component of equity at the reporting dates and the changes in these components. The preparation and presentation of the statement of changes in equity is governed by IAS 1 Presentation of Financial Statements.

Notes to IFRS financial statements

In accordance with IAS 1 Presentation of Financial Statements, a complete set of financial statements must include a balance sheet, statement of profit or loss and other components of comprehensive financial performance, statement of changes in equity, statement of cash flows, accounting policies and notes. .

Interim financial reporting

Interim financial statements represents either the company's complete financial statements or a condensed version of the financial statements for an interim period. Interim period - a period shorter than a full financial year (half year, quarter). The decision to provide interim financial statements is made by companies independently. Requirements for its preparation may come from securities exchange regulators, governments, shareholders and others. The preparation of interim financial statements is governed by the requirements of IAS 34 Interim Financial Reporting.

Financial statements are a structured representation of the financial position and financial performance of an enterprise.

The purpose of financial statements is to provide information about the financial position, financial performance and cash flows of an enterprise that is useful to a wide range of users in making economic decisions. Financial statements also show the results of managing the resources entrusted to the management of the enterprise. This is the main source of information for various users, both external (investors, creditors, partners) and internal (management, managers at various levels of management, owners).

The presentation procedure and composition of the statements are determined by IAS 1 “Presentation of Financial Statements”. The standard provides general reporting requirements that are, however, very flexible.

Each report must contain the name of the reporting entity, whether it is based on the performance of an individual company or a group of companies, the reporting date or reporting period, the currency in which the balance sheet is prepared, and the format in which the figures are presented (thousands of US dollars, millions . US dollars).

Financial statements must be presented at least once a year and contain numerical information for at least two reporting periods. IFRS does not require companies to establish a calendar year for their financial year. Some companies choose to report 52 weeks. IFRS does not prevent this practice. The beginning of the reporting period can be determined With the first day of any month of the year. A company must present its financial statements no later than six months after the reporting date.

A complete set of financial statements according to IFRS contains:

* statement of financial position as of the end of the reporting period;

* statement of comprehensive profit for the period;

* statement of changes in capital for the period;

* cash flow statement;

* notes, consisting of a summary of significant accounting policies and other explanatory information;

* the statement of financial position at the beginning of the earliest comparative period if an entity applies accounting policies retrospectively or restates items retrospectively in its financial statements, or if it reclassifies items in its financial statements.

An enterprise may use report titles that differ from those used in this standard.

In addition to financial statements, many enterprises provide management's financial review, which describes and explains the key features of the enterprise's financial performance and financial position, as well as the major uncertainties it faces.

Such a report may contain an overview of:

The main factors influencing financial results, including changes in the external environment in which the enterprise operates, the enterprise's response to these changes and their impact, as well as the enterprise's investment policy aimed at maintaining and improving financial results, including dividend policy;

Sources of funds for the enterprise and its target indicators of the ratio of liabilities and capital; And

Those resources of the enterprise that are not recognized in the statement of financial position in accordance with IFRS.

Many enterprises also provide reports and official bulletins, such as those on environmental issues and value added, especially in industries where environmental factors are important and where workers are seen as an important user group of the reports.

IFRS standards do not apply to such additional reports.

Interim financial reporting in accordance with IFRS 34 “Interim Financial Reporting” contains a set of financial statements for a period shorter than the full reporting year of a given organization. These reports are presented in a compressed format in all forms. At the same time, the company decides how much information to disclose in detail, taking into account the materiality of the interim period data.

For all numerical data in the reports, comparative information of the previous period must be provided.

Drawing up reports according to international regulations makes it possible for Russian companies to enter the global capital market

In Russia and around the world, to prepare financial information, in addition to national accounting rules, organizations defined by law apply international standards - reporting is prepared in accordance with IFRS. What it is? Let's look at it in detail.

IFRS - International Financial Reporting Standards - is a list of rules and clarifications, guided by which large companies must prepare accounting information and post these indicators in the public domain for third-party users.

Such reports are used in many countries of the world (more than 100 countries) by credit organizations (banks); Insurance companies; companies that place shares on national or international stock markets and others.

What does it include

Documents regulating IFRS consist of:

• There are 16 standards that have been developed since 2001 by the IASB - the International Financial Reporting Standards Council (IFRS), taking into account those that will be introduced later.

  It regulates such indicators as: rent, revenue from contracts with customers, fair value assessment, joint ventures and others.

• There are 41 standards developed from 1973 to 2001 by the IASB - the Committee on International Financial Reporting Standards (IAS).

  They regulate, among other things: inventories, cash flow statement (CFDS); construction contracts; income taxes and others.

• Clarifications of the above standards, which are developed by the Interpretations Committee.

The website of the Ministry of Finance of the Russian Federation contains a full version of all standards in Russian, explanations and teaching aids. Compiled in a consolidated manner. In Russia, more than 140 organizations prepare reports in accordance with IFRS, publish them on their websites or post on the website information about the place of publication of reports.

What is it for?

Why do I need IFRS reporting? The need for uniform standards is due to the following factors:

• Comparing the performance indicators of different enterprises (including at the international level) is much more effective using unified standards;
• To enter the foreign capital market (for example, for credit institutions to receive financing abroad), it is necessary to provide international reports, since Russian accounting standards (RAS) are unclear abroad, and it is impossible to prepare financial information for each country separately;
• This makes it possible for external users to make decisions regarding companies based on analysis and comparison of their indicators.

For example, if the issue of choosing a credit institution for cooperation is being decided, then you need to analyze the results of financial activities. For example, Sberbank, in its IFRS reports for the third quarter of 2016, showed a record increase in net profit, which amounted to 110%, in physical terms this is 137 billion rubles.

Legislative regulation

Currently, relations in the field of providing financial data under IFRS are regulated by Law No. 208-FZ “On Consolidated Financial Statements”, adopted in Russia in 2010. The law applies to organizations:

• Insurance organizations (except exclusively for medical insurance).
• Pension funds (non-state).
• Credit organizations.
• Clearing organizations.
• Joint stock companies whose shares belong to the Russian Federation.
• Organizations whose shares are admitted to trading and included in the quotation list.
• Unitary enterprises, the list of which is approved by the government.

In addition, a number of orders of the Ministry of Finance, Government Decrees and other documents were issued.

Russian companies publish information on the results of financial activities in Russian, but the law does not prohibit the publication of data in foreign languages. The annual report (for which an audit is required) is drawn up no later than four months after the end of the year, the interim one no later than two months from the reporting period for which it was compiled. The supervisory function over the provision and disclosure of consolidated statements is performed by the Central Bank of the Russian Federation.

The main difference between consolidated reporting according to international rules and national accounting is that the first is aimed at investors, access to the international market, and the second is more needed for statistics and inspection bodies.

The preparation of such information requires accountants to constantly monitor legislative innovations and study current standards. Conferences dedicated to the practice of applying IFRS are held annually in Moscow. For example, on January 27, 2017, the seventh such conference will take place, prepared by the CFO portal jointly with the CFO Club.

According to Russian standards, the reporting period is a calendar year. However, IFRS does not require that the financial year coincide with the calendar year. Does this mean that the company can independently choose its reporting period and it will not necessarily be a calendar year?

Not only according to Russian reporting standards. The new accounting law No. 402-FZ5, which will come into force in January 2013, also names a calendar year. This law also states that the legal regulation of consolidated financial statements is carried out in accordance with this law, unless otherwise provided by another law (in our case, the law on consolidated statements).
The law on consolidated reporting only makes reference to IFRS, and IFRS does not establish the beginning and end of the financial year. This means that the norm of the accounting law that the reporting period is a calendar year must apply. It turns out that it is impossible, for example, to select a year from August to July, since the accounting law does not exclude consolidated reporting from its scope of regulation. And according to it, the reporting year is from January to December.

The obligation to submit interim reports is not established by the law on consolidated reporting

Igor Robertovich, let's talk about interim reporting. When should I take it for the first time?

The Law on Consolidated Reporting does not generally establish an obligation for a company to submit interim reports. It is necessary to look at other legislative acts regulating such duties. For example, if under the securities market law6 a company is required to prepare interim consolidated statements, then it will prepare them in accordance with IFRS.

Interim reporting is abbreviated compared to annual reporting

What is meant by condensed interim reporting? How does a company determine its composition?

I note that there is no concept of abbreviated interim reporting. “Abridged” is the main characteristic of interim reporting. That is, interim reporting has an abbreviated form compared to annual reporting.

In the practice of Russian accounting standards, such a formal approach has been developed: annual reporting has its own components (balance sheet, etc.), and interim reporting (quarterly) has only a balance sheet and a profit and loss account.

IFRS has a different approach. It is not the number of reports that is being reduced, but the composition of indicators in them. For example, the balance sheet of interim reporting under IFRS may be abbreviated, that is, not all lines in it will be filled in.

Interim reporting indicators should reflect new trends in the company

What does a reduced balance look like? What information should be included in it?

International standards stipulate that, first of all, it is necessary to disclose and present data that distinguishes the interim reporting period from the previous annual reporting under IFRS. That is, everything that repeats the trends and vector of development that follow from the annual reporting indicators may not be shown in the interim reporting. And everything that is unpredictable, that was not expected in the interim period - new facts and operations, trends - they need to be presented in detail..

The abbreviated balance may conventionally consist of three lines

What if the company, after submitting its annual consolidated financial statements, remains unchanged?

If everything goes unchanged and all extrapolations of annual reporting figures are justified, the balance sheet can conditionally consist of three lines: assets, liabilities and capital. And in the income statement - revenue, expenses and profit for the period. In my opinion, this situation is unlikely in practice.

The frequency of submission of interim reporting is established for specific types of companies

Igor Robertovich, for what period do you need to submit interim reports?

The beginning of the interim reporting period coincides with the beginning of the year, and the interim period must be shorter than a year. Theoretically, it is possible to prepare interim consolidated statements, for example, for 100 days or 20 weeks.
The frequency of submission of such reports is established in other regulations, and not in the law on consolidated reporting. For example, the rules for presenting information in connection with the issue of securities may establish a certain frequency for a specific type of issuer. They will report at this frequency.

Tax inspectors can use IFRS reporting data during an audit

Let's talk about tax audits. Can tax inspectors refer to consolidated reporting indicators in a report on violation of tax laws?

Not directly, but indirectly they can. According to tax accounting data, for example, the company has taken into account the expense, but according to the consolidated reporting data this expense is not, and this is directly indicated by the indicators of the consolidated reporting. Inspectors can use this information to prove violations. This is not due to different rules for reporting under Russian standards and under IFRS.

Is it mandatory to audit financial statements prepared in accordance with IFRS?

An audit of consolidated statements in accordance with IFRS is mandatory; this is established by the law on consolidated statements 7. The auditor's report is provided and published together with these consolidated financial statements. There are no special qualifications for auditing consolidated statements; general requirements apply to auditors. That is, there will be no separate IFRS auditor certificate.

Footnotes:

1 Federal Law of July 27, 2010 No. 208-FZ
2 Federal Law of November 21, 1996 No. 129-FZ
3 p. 1 art. 2 of the Federal Law of July 27, 2010 No. 208-FZ
4 p. 2 tbsp. 3 of the Federal Law of July 27, 2010 No. 208-FZ
5 Federal Law of December 6, 2011 No. 402-FZ
6 Federal Law of April 22, 1996 No. 39-FZ
7 tbsp. 5 of the Federal Law of July 27, 2010 No. 208-FZ