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It is registered

Ministry of Justice

Republic of Uzbekistan

On January 21, 2004 No. 1300

RESOLUTION OF BOARD OF CENTRAL BANK OF THE REPUBLIC OF UZBEKISTAN

of November 8, 2003 No. 27/3

About approval of the Regulations on financial accounting of grants in commercial banks

Based on Articles 3, "About the Central bank of the Republic of Uzbekistan" the Board of the Central bank of the Republic of Uzbekistan decides 7 and 51 Laws of the Republic of Uzbekistan:

1. Approve Regulations on financial accounting of grants in commercial banks according to appendix.

2. And cash execution of the State Budget (D. A. Oripov) within 10 days to provide to accounting department, the reporting this Provision to the Ministry of Justice of the Republic of Uzbekistan for state registration.

3. This resolution becomes effective since January 31, 2004 after state registration in the Ministry of Justice of the Republic of Uzbekistan.

4. To impose control of execution of this resolution on the first deputy chairman of the Central bank M. R. Zhumagaldiyev.

 

Chairman of the board of the Central bank

F.Mullazhanov

Approved by the Resolution of Board of the Central bank of November 8, 2003 No. 27/3

Regulations on financial accounting of grants in commercial banks

I. General provisions

This Provision is developed according to the laws of the Republic of Uzbekistan "About the Central bank of the Republic of Uzbekistan", "About banks and banking activity" and "About financial accounting" and establishes procedure for financial accounting of grants according to international accounting standards (further in the text - IFRS) for commercial banks of the Republic of Uzbekistan (further in the text - banks).

This Provision is applied by banks to conducting financial accounting of the grants received by banks from the government, governmental bodies and the similar organizations, including local, national or international. This Provision is not applied to the grants received from shareholders of bank.

II. Determinations

1. For the purpose of this Provision the following concepts are used:

the grant is assistance from the government, governmental bodies and the similar organizations, including local, national or international, in the form of transfer of the resources to bank under certain conditions connected with financing of the corresponding costs in last or future operating activiies of bank. Those types of government aid which cannot be reasonably estimated, or such transactions with the government which do not differ from regular transactions of bank do not belong to grants. Provision of free technical or marketing advices or provision of guarantees can be examples of such government aid;

government aid is the actions of the government directed to provision of economic benefits to bank or bank system in general. Government aid in the context of this Provision does not include the indirect benefits provided by means of influence on general terms of functioning, for example, creation of infrastructure in the developing areas or establishment of certain restrictions for competitors;

the grants relating to assets are grants which main condition of provision consists that the bank receiving grant assumes obligation to purchase, construct or any different way to acquire non-current assets. It can be followed by the additional terms limiting asset type, their location or terms of their acquisition or ownership;

the grants relating to the income are the grants which are not relating to assets;

the conditional and irretrievable credits are the credits which repayment the creditor refuses in case of accomplishment of the certain ordered conditions;

fair value is the amount for which it is possible to exchange asset or to extinguish the obligation during transaction under general conditions between the knowledgeable, wishing to make such transaction parties.

III. Procedure for recognition and measurement of grants

2. Grants on pro rata basis belong on the income of those periods in which the corresponding expenses connected with accomplishment of conditions of grant are incurred.

3. Grants are not reflected directly in the account of the capital.

4. Banks shall not recognize grants if there is no reasonable confidence that:

a) the bank will satisfy the conditions connected with grant; and

b) these grants will be received.

The actual receipt of grant is not reasons for approval that the conditions connected with grant were or will be executed.

5. Banks recognize grant as the income as the same method regardless of whether it was received in the form of money at the beginning of accomplishment of conditions of grant or in parts throughout certain period of time or in the form of reducing the obligation to the government, governmental bodies and the similar organizations, including local, national or international.

6. The following grants shall be recognized quality of the income of that period when they are subject to obtaining:

a) provided as compensation of the incurred expenses or losses; or

b) provided in the form of rendering direct financial support by the government to bank without any costs connected with grant in the future.

7. Grant can be presented in the form of transfer of non-cash asset, including the equipment, the earth or other resources, for use by bank. In these cases the bank shall estimate fair value of non-cash asset and consider grant and asset at this fair value.

8. Banks reflect the received grants in the balance statement as the delayed income.

9. The delayed income on the grants relating to depreciable assets is recognized quality of the income by crediting of the account "Other interest-free incomes" on pro rata basis throughout the term of useful service of asset (appendix N 1).

10. The delayed income on the grants relating to the income or not depreciable assets is recognized quality of the income by crediting of the account "Other interest-free incomes" in proportion to recognition of those expenses which they shall compensate (appendix No. 2).

11. In case of circumstances under which the bank needs to return grant the return amount, first of all, shall be subtracted from any unamortized amount of the delayed income which arose with respect thereto grant. If the returned amount exceeds any delayed income, or such delayed income is absent, return of the amount shall be recognized immediately quality of expense (appendix No. 3).

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