Magistrant, Kuban state university, Krasnodar
Research supervisor: Taranets N.F.
Cand. Econ. Sci., Associate professor, Kuban State University, Krasnodar
Abstract:The purpose of this article is to explain accounting principles as per the opinions of Russian scholars. Another aim is to highlightthe importance of accounting policies and applying international standards in Russia and other countries. The constraints that prevent countries from applying these standards will also be discussed.
Keywords: Accounting policies, International financial reporting standards, Russian accounting standards, accounting reports.
УЧЕТНАЯ ПОЛИТИКА В РОССИИ И МЕЖДУНАРОДНОМ
СТАНДАРТЫ ФИНАНСОВОЙ ОТЧЕТНОСТИ
Магистрант, Кубанский государственный университет, г. Краснодар
Научный руководитель: Таранец Н.Ф.
к. э. н., проф., Кубанский государственный университет, г. Краснодар
Аннотация: Цель данной статьи – объяснить принципы бухгалтерского учета по мнению российских ученых, и подчеркнуть важность учетной политики и применения международных стандартов в России и других странах. Также будут обсуждаться ограничения, мешающие странам применять эти стандарты.
Ключевые слова:Учетная политика, Международные стандарты финансовой отчетности, Российские стандарты бухгалтерского учета, бухгалтерская отчетность.
Everyone knows that in any company, accounting must be carried out in accordance with certain rules. The challengelies in establishing these rules, the implementation of which would provide the greatest effect from the accounting. It is for this purpose that the accounting policy of the economic entity is being developed. The main purpose and the main task of the adopted accounting policy is to reflect the activities of the organization as adequately as possible to form complete, objective and reliable information about itthat isuseful for making effective economic decisions. The accounting policy covers all aspects of the accounting process – methodological, organizational and technical, thereby ensuring the integrity of the accounting system in the organization.
Based on accounting policies, procedures are developed and followed, including payment of invoices, cash management and budgeting. Accounting policies are usually adopted by senior management and have not changed much over the years. It is designed for long term use and reflects corporate values and ethics. The accounting policy of the company does not coincide with the principles of accounting. Accounting Principles – Global or National Accounting Policies. Companies must adhere to them when developing their own internalaccounting policies.
An accounting policy can relate to any financial issue such as account mergers, amortization methods, goodwill, inventory pricing, and research and development costs. Policy may vary depending on individual industries and sectors. Many of the disclosure requirements for accounting policies are mandatory, especially when it comes to a public company.
In international practice, accounting policy is the set ofrules that a company adheres to for the preparation and presentation of financial statements, as well as determining its financial position and calculating its financial result.
The application of accounting policies may differ from one company to another and from one system to another, but it must be consistent with either global accounting principles (GAAP) or international reporting standards (IFRS).
Currently, more attention is being paid to accounting policy, because it serves as an important tool in enterprise management. In modern conditions, the economic activity and financial results of the organization depend on the strategy adopted by the enterprise, which determines the accounting policy. Against the background of the crisis in the economy, the need to stabilize the financial position of enterprises is growing.
The concept of “accounting policy” in Russian accounting practice arose when, after the collapse of the Soviet Union, the planned economy was replaced by the market one. Accounting in the USSR (The Union of Soviet Socialist Republics) was strictly regulated and did not provide an opportunity for an enterprise to use alternative accounting methods. In 1992, this term was consolidated in the statute on accounting and reporting in the Russian Federation.
And we can provide some definitions of accounting policies. The Federal Law issued on 06.12.2011 No. 402 FZ “On Accounting” defined a set of methods for conducting accounting by an economic entity, its accounting policy.
As for the International Financial Reporting Standard No. 8 “Accounting Policies and Changes in Accounting Estimates and Errors”, it defines accounting policies, principles, frameworks, generally accepted terms, rules and practices applied by the organization in preparing and presenting financial statements.
As for Russian accountants, they have their own definitions. For example, Kondrakov N.P. defines accounting policy as the organization’s choice of accounting options and the evaluation of accounting objects in which variation is permitted. It also includes the forms and techniques of maintaining and organizing accounting on the basis of specific assumptions and requirements and the characteristics of its activities (organizational and technological, number and qualifications of accounting personnel, the level of technical processing of accounting workers, etc.)
Moreover, Kuter M.I. one of the most prominent scholars in the field of economics,indicates that accounting policy refers to the choice between alternative accounting options.
As for the accountants, Khakhonova N.N., Alekseeva I.V., and Bakhteev A.V., they define accounting policies as a set of solutions, principles and methodological rules chosen to reflect the property, obligations, revenues, expenditures, capital, financial and economic activities and operations in accounting, tax accounting and reporting, adopted by the company’s management.
According to Lvova I.N., accounting policy can be described as the area of independent decisions of the organization about which accounting methods to use and the result of the creative approach of the accountant to create the accounting model of the organization.
In conclusion, the definition of the concept of “accounting policy” should be specific and at the same time accurately reflect those aspects that characterize its economic content. Speaking about the aspects of accounting policy, it should be noted that here, too, the opinions of various authors differ, which is primarily due to the lack of regulation from the legislative side.
The classification of aspects of accounting policies is reflected in the following table.
|Aspects of accounting policies based on the types of accounting||Aspects of accounting policies based on the applied elements||Special Aspects of Accounting Policies|
|Financial aspect||Methodological aspect||Analytical aspect|
|Tax aspect||Organizational aspect||International aspect|
|Management aspect||Technical aspect|
In addition to the traditional methodological and organizational aspects, Professor Kuter M.I. allocates accounting policies for the purposes of management, financial and tax accounting in separate aspects. Mislavskaya N.A. and Polenova S.N. consider it expedient to single out the methodological and organizational and technical sections, combining two sections into one, which does not affect the content of the accounting policy. Some authors believe that the content of the accounting policy should include methodological, technical and organizational aspects.
The methodological aspect determines the options for reflecting information in the accounting based on alternative techniques and methods. This aspect allows you to reflect the same transactions in different ways, different accounting entries and in different estimates. Forms of maintaining and organizing accounting by a commercial organization determines the organizational aspect. This section of the accounting policy does not affect the information generated in the accounting accounts and presented in the financial statements, in contrast to the methodological one. The technical aspect of accounting policy provides for working tools for the implementation of the methodological aspect.
In addition to the above, Sakhchinskaya N.S. highlights the analytical and international aspects. The analytical aspect allows you to collect information for analysis, building a financial strategy of an enterprise, forecasting financial activities. The international aspect makes it possible to present information in the context of international standards, which can attract foreign investors. The existence of many types of accounting (financial, tax, management, etc.) and the differences in the rules and principles of their conduct allow us to distinguish an independent accounting policy in relation to each type of accounting. In other words, Kuter M.I. said that today it is possible to single out at least its managerial, tax and financial aspects.
Regardless of the aspects of accounting policies, accounting policies are very important. And its importance is reflected in the following reasons:
- Correct basis. Financial matters should clarify company policy as financial statements should be prepared in accordance with accepted standards. Accounting policies also provide a framework that must be followed in order for a company to properly compile its financial statements.
- Focus on investors. The company adheres to accounting policies and prepares financial statements, with the help of which it allows investors to study this data and compare the company with other companies in the same field, industry or other areas.
- Disclosure and objectivity. In general, accounting policy allows you to fully disclose the objectivity of comparisons of the company with others and the effectiveness of achieving the goals for which they were set.
- Formation and application of accounting policies in accordance with international standards. Almost every international financial reporting standard deals with accounting policy issues, but IAS 8 is recognized as the backbone and the most important of them.
However, it is possible to encounter many problems when defining or applying an accounting standard or rules and using accounting policies on a specific situation or field of activity for a particular company. Therefore, these problems must be considered before using, including:
- Stability (consistency) of accounting policies. Any entity or company must apply this policy consistently and consistently to all financial transactions in it, unless any change in interpretation or other standard is required.
- Changes in accounting policies. A change requires mandatory clarification or interpretation and is carried out if it ensures greater accuracy and / or usefulness of the data.
- Economic factors and methods of financing. The accounting policy is influenced by the economic situation, financing methods, the company’s participation in the group, etc.
- Sociocultural factors. The culture and circumstances of a society must be taken into account when establishing, applying and determining accounting policies. Accounting policies differ from one country and culture to another.
Accounting policies can take many forms. Some of its forms are mandatory in any organization, and some are developed at the discretion of the company’s management.
- Accounting policy for accounting purposes. This form of accounting policy is mandatory for any organization, as specified in the Federal Law “On Accounting”.
An accounting policy for accounting contains:
- composition of accounting objects;
- the procedure for recognizing objects of accounting;
- the order of inventory of accounting objects;
- the procedure for determining the structure of internal control of accounting objects;
- methodology for determining the value of accounting objects;
- other regulations.
For disclosure of information on the accounting of individual elements in accounting policies for accounting, reference is made to various regulatory and legislative acts. As a rule, these are various PBUs regulating the accounting procedure and reflection in the reporting of individual elements of accounting, Instructions and Regulations for accounting for individual objects.
- Accounting policy for tax accounting purposes. This form of accounting policy is also mandatory for any enterprise, as indicated in the Tax Code of the Russian Federation. This document is based on the provisions of the Tax Code.
An accounting policy for tax accounting contains:
- the procedure for recognizing and calculating the taxable base;
- composition and classification of income and expenses involved in the formation of the taxable base;
- the procedure for calculating depreciation;
- other provisions.
- Accounting policy for management accounting purposes. This form of accounting policy is optional and is applied at the discretion of the management of the enterprise. As a rule, this form of accounting policy is applied in large enterprises with a complex management structure (when the management of a separate process is a chain of many links).
Accounting policy for management accounting contains:
- the scheme of organizational management of the enterprise;
- responsibility of heads of departments for accounting objects;
- the composition and structure of individual objects of management accounting;
- the composition of documents and registers for the reflection of business transactions in management accounting;
- other provisions on management accounting.
- Accounting policy for production accounting. This form of accounting policy is also optional and is applied at the discretion of the company’s management. As a rule, this form of accounting policy is applied in manufacturing enterprises with a complex production structure (when many types of products are produced in several workshops).
Accounting policy for production accounting contains:
- the scheme of managing the production process at the enterprise;
- responsibility of heads of production departments for production facilities;
- the composition and structure of certain types of products;
- the composition of documents and registers for the reflection of business transactions in the production process;
- other provisions on production accounting.
Accounting policy in accordance with IFRS is one of the most relevant topics for companies that are beginning to apply International Financial Reporting Standards (IFRS).
The IFRS system was created to unify the principles and methods of accounting used by companies from different countries to prepare financial statements. Since the reporting is prepared and presented to external users, in different countries of the world there are differences in the content, formation and presentation of indicators characterizing the results of activities. They are caused by the special conditions of the “environment”, among which are social, economic, political, legal.
In order to draw up reports that are adequately perceived and understood by users of different countries, International Financial Reporting Standards have been created and are being improved. They are designed to bring together the rules for its preparation and procedures for the preparation and presentation of information about the activities of a particular company.
The principles for preparing and presenting financial statements (principles) in accordance with IFRS are the provisions that underlie the preparation and presentation of financial statements for external users.
In accordance with the requirements of the principles for the preparation and presentation of financial statements in accordance with IFRS, companies must comply with the following underlying assumptions:
- the principle of a going concern. An enterprise is considered to be operational if, at the reporting date, its management has no reason to believe that the enterprise will cease to exist and will not be able to pay off its debt;
- the principle of accrual. Income and expenses are recognized in the period in which they arise, regardless of whether they are paid.
Requirements (qualitative characteristics) used in the preparation of financial statements:
- completeness – all material items should be reflected in the reporting;
- reliability – all facts of economic life must be recorded in the reporting;
- neutrality – the organization should prepare and submit reports to all interested users;
- comparability – the comparability of data with previous reporting periods.
Financial statements are provided annually to external users. In preparing the financial statements, management is required to assess the company’s ability to continue as a going concern. When disclosing financial statements, the offset of assets and liabilities, income and expenses is not performed, except when permitted by the standards. IAS 1 applies to individual company financial statements and group consolidated financial statements. Management is responsible for the preparation and presentation of the financial statements. IAS 1(Presentation of Financial Statements) is a mandatory document for all companies preparing financial statements in accordance with IFRS.
From here we see the importance of accounting policies as a tool for managing institutions, and what has a significant impact on the entire company’s management system, and thus indirectly affects the performance indicators of the institution.
Compliance with international standards is no less important in Russian and other domestic accounting systems with International Financial Reporting Standards, which makes it possible to avoid crisis situations in the market. It also ensures financial transparency for companies, which is important for potential investors, as international reporting standards allow the possibility of applying Economic knowledge in order to prepare objective and accurate reports on institutions. With the development of market relations and foreign economic cooperation, the issues of standardization and harmonization of financial reporting in various countries have become closely related. Therefore, harmonization is a process of convergence of methods, standards, tools, principles and rules for accounting and financial reporting. Standardization is the process of forming rules, principles and norms that best meet and standardize the requirements of information users in different countries. Standardization and harmonization of the accounting system are two interrelated processes in which IFRSs are of great importance.
- Taranets, N.F. Lugovskoy, D.V. Kuter, M.I. Problems of accounting policy formation in the context of transition to International financial reporting standards / N.F. Taranets, D.V. Lugovskoy, M.I. Kuter // Methodical journal – 2005. – № 1. – 11 p.
- Kuter, M.I. Introduction to accounting: textbook / M.I. Kuter. – Moscow: INFRA-M,- 2018 .- 522 p.
- Ievleva, M. S. The concept of accounting policy considered in the economic literature / M. S. Ievleva. – Text: direct // Young scientist. – 2019. – No. 20 (258). – 224-226 p.
- Khakhonova, N.N. Accounting accounting and reporting: textbook / N.N. Khakhonova, I.V. Alekseeva, A.V. Bakhteeva. – Moscow: RIOR: INFRA-M, 2017. – 552 p.
- Russian Federation. Laws. The Civil Code of the Russian Federation: Part Two: CC: text as amended on October 1, 2019: passed by the State Duma on December 22, 1995 // Consultant: reference and legal system. – Moscow,- 1997.
- Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso Financial Accounting: Tools for Business Decision Making, 9th Edition,- November 2018 – 832p.