of February 21, 2018 No. 14
About approval of the Instruction for financial accounting of financial instrument transactions in banks of Ukraine
According to Articles 7, of 15, of 41, 56 Laws of Ukraine "About the National Bank of Ukraine", article 68 of the Law of Ukraine "About banks and banking activity", for the purpose of enhancement of regulatory legal acts which establish procedure for account management of financial accounting of banks of Ukraine the Board of the National Bank of Ukraine DECIDES:
1. Approve the Instruction for financial accounting of financial instrument transactions in banks of Ukraine which is applied.
2. To banks till March 30, 2018 to develop and approve internal procedures (provisions) / to bring internal procedures (provisions) and to approve them concerning establishment of technique:
1) conducting testing of cash flows on financial assets;
2) determinations of business models of financial asset management;
3) estimates of the expected credit losses;
4) determinations of fair value of financial instruments according to the International accounting standard 13th "Fair value".
3. Recognize invalid regulatory legal acts of the National Bank of Ukraine according to the list which is attached.
4. To accounting department (Lukasiewicz B. V.) after official publication to inform banks information on adoption of this resolution.
5. To impose control over the implementation of this resolution on the vice-chairman of the National Bank of Ukraine Borisenko G. N.
Acting as Chairman
Ya. V. Smoly
Approved by the Resolution of Board of the National Bank of Ukraine of February 21, 2018 No. 14
1. This Instruction is developed according to the Laws of Ukraine "About banks and banking activity", "About the National Bank of Ukraine", "About financial accounting and the financial reporting in Ukraine", "About securities and the stock market", other legal acts of Ukraine, regulatory legal acts of the National Bank of Ukraine and international accounting standards.
2. This Instruction establishes the main requirements for reflection in financial accounting of transactions of banks with financial instruments. The bank performs financial accounting of financial instrument transactions according to internal operational procedures (rules) and internal technique developed taking into account requirements of this Instruction, the legislation of Ukraine and international accounting standards.
3. In this Instruction terms are used in such value:
1) the active market - the market in which transactions for assets or liabilities happen to sufficient frequency and in sufficient amount to provide information on pricing on continuous basis;
2) the amortized cost of financial asset or the financial liability - the amount on which the financial asset or the financial liability in case of initial recognition is estimated, less the received or paid means [the main amount of debt, interest incomes (expenses) or other payments connected with initiation of financial asset or the financial liability], increased or reduced by the size of the accumulated depreciation calculated with use of effective rate of percent, - differences between originally acknowledged amount and repayment sum of the financial instrument, and also for financial assets, corrected taking into account provision under credit losses;
3) book value is the cost at which the asset and obligations are reflected in balance. Book value for financial asset and the financial liability consists of the main amount of debt, the added percent, unamortized award (discount), and for financial asset - the provision amount under the expected credit losses;
4) gross carrying amount of financial asset - the amortized cost of financial asset before adjustment at provision size under credit losses;
Expenses on transactions - the additional expenses which are directly connected with acquisition, release or disposal of financial asset or the obligation and which could not arise if the subject of housekeeping did not issue did not acquire 5) or did not realize the financial instrument. The commission charges paid to agents, consultants, brokers and dealers, charges to regulating authorities, stock exchanges, taxes and the state tax, other expenses belong to expenses on transaction. Expenses on transactions do not include discounts or awards on debt financial instruments, administrative expenses;
6) date of balance - date for which the balance of bank is made. Usually date of balance is the end of the last day of the accounting period;
7) activity date is date with which the asset shall acquire or sell bank;
8) date of reclassification - the first day of the accounting year following in what the bank changed business model that led to reclassification of financial asset (financial assets). Date of reclassification is date of initial recognition of the reclassified financial asset;
9) settlement date is date with which the asset is transferred to bank (is recognized asset of bank) or is transferred by bank (asset derecognition). Settlement date is date with which begins (in case of acquisition) and charge of percent on assets of bank stops (in case of realization);
10) long-term contribution (deposit) - the placed or raised funds for term more than one year;
11) long-term loans - the granted or obtained loans are one term more than one year;
12) discount is the amount of excess of nominal value of financial instruments over their fair value in case of initial recognition without the percent added for the period of acquisition if such cost is lower, than nominal value;
13) issued differences (share premium) is excess of cash amount, received from primary release or sale of own shares (other corporate laws), over their nominal or excess of nominal of shares (other corporate laws) over the cost of their redemption;
14) effective rate of percent - rate which precisely discounts the expected flow of future money payments or receipts throughout the expected effective period of financial asset or the financial liability to gross carrying amount of financial asset or the amortized cost of the financial liability. The bank perfroms calculation of effective rate of percent on the basis of the expected future cash flows taking into account all terms of the contract with financial asset without the expected credit losses;
15) the effective rate of percent corrected taking into account credit risk - rate which precisely discounts the expected flow of future money payments or receipts throughout the expected effective period of financial asset to the amortized cost of financial asset which is the acquired or created depreciated financial asset. The bank perfroms calculation of the effective rate of percent corrected taking into account credit risk on the basis of the expected future cash flows taking into account all terms of the contract with financial asset and the expected credit losses; (5 *)
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