INSTRUCTION OF CENTRAL BANK OF THE RUSSIAN FEDERATION

of December 18, 2018 No. 5018-U

About modification of the Provision of the Bank of Russia of October 2, 2017 No. 606-P "About procedure for reflection on accounts of financial accounting by credit institutions of transactions with securities"

1. According to article 57 of the Federal Law of July 10, 2002 No. 86-FZ "About the Central bank the Russian Federation (Bank of Russia)" (The Russian Federation Code, 2002, No. 28, Art. 2790; 2003, No. 2, Art. 157; No. 52, Art. 5032; 2004, No. 27, Art. 2711; No. 31, Art. 3233; 2005, No. 25, Art. 2426; No. 30, Art. 3101; 2006, No. 19, Art. 2061; No. 25, Art. 2648; 2007, No. 1, Art. 9, Art. 10; No. 10, Art. 1151; No. 18, Art. 2117; 2008, No. 42, Art. 4696, Art. 4699; No. 44, Art. 4982; No. 52, Art. 6229, Art. 6231; 2009, No. 1, Art. 25; No. 29, Art. 3629; No. 48, Art. 5731; 2010, No. 45, Art. 5756; 2011, No. 7, Art. 907; No. 27, Art. 3873; No. 43, Art. 5973; No. 48, Art. 6728; 2012, No. 50, Art. 6954; No. 53, Art. 7591, Art. 7607; 2013, No. 11, Art. 1076; No. 14, Art. 1649; No. 19, Art. 2329; No. 27, Art. 3438, Art. 3476, Art. 3477; No. 30, Art. 4084; No. 49, Art. 6336; No. 51, Art. 6695, Art. 6699; No. 52, Art. 6975; 2014, No. 19, Art. 2311, Art. 2317; No. 27, Art. 3634; No. 30, Art. 4219; No. 40, Art. 5318; No. 45, Art. 6154; No. 52, Art. 7543; 2015, No. 1, Art. 4, Art. 37; No. 27, Art. 3958, Art. 4001; No. 29, Art. 4348, Art. 4357; No. 41, Art. 5639; No. 48, Art. 6699; 2016, No. 1, Art. 23, Art. 46, Art. 50; No. 26, Art. 3891; No. 27, Art. 4225, Art. 4273, Art. 4295; 2017, No. 1, Art. 46; No. 14, Art. 1997; No. 18, Art. 2661, Art. 2669; No. 27, Art. 3950; No. 30, Art. 4456; No. 31, Art. 4830; No. 50, Art. 7562; 2018, No. 1, Art. 66; No. 9, Art. 1286; No. 11, Art. 1584, Art. 1588; No. 18, Art. 2557; No. 24, Art. 3400; No. 27, Art. 3950; No. 31, Art. 4852; No. 32, Art. 5115; No. 49, the Art. 7524), part 6 of article 21 of the Federal Law of December 6, 2011 No. 402-FZ "About financial accounting" (The Russian Federation Code, 2011, No. 50, Art. 7344; 2013, No. 26, Art. 3207; No. 27, Art. 3477; No. 30, Art. 4084; No. 44, Art. 5631; No. 51, Art. 6677; No. 52, Art. 6990; 2014, No. 45, Art. 6154; 2016, No. 22, Art. 3097; 2017, No. 30, Art. 4440; 2018, No. 1, Art. 65; No. 31, Art. 4861; No. 49, the Art. 7516) and the solution of the Board of directors of the Bank of Russia (the minutes of the Board of directors of the Bank of Russia of December 14, 2018 No. 38) to bring in the Provision of the Bank of Russia of October 2, 2017 No. 606-P "About procedure for reflection on accounts of financial accounting by credit institutions of transactions with securities", registered by the Ministry of Justice of the Russian Federation on December 12, 2017 No. 49215, on July 18, 2018 No. 51630, the following changes.

1.1. The paragraph one of Item 5.4 to state in the following edition:

"5.4. Forming of reserves on possible losses according to the debt securities and bills of exchange estimated on depreciated cost is performed according to the procedure, No. 611-P provided by the Provision of the Bank of Russia of October 23, 2017 "About procedure for forming by credit institutions of reserves on possible losses", the registered Ministry of Justice of the Russian Federation on March 15, 2018 No. 50381 (further - the Provision of the Bank of Russia No. 611-P), the Provision of the Bank of Russia No. 590-P.".

1.2. In Item 5.7:

state subitem 5.7.1 in the following edition:

"5.7.1. When carrying out reclassification of debt securities from category estimated on depreciated cost at category estimated at fair value through other comprehensive income credit institution performs transfer of cost of debt securities, the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on depreciated cost of debt securities:

The debit of the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or accounts No. 513 "Bills of exchange, estimated at fair value through other comprehensive income"

The account No. 504 credit "The debt securities estimated on depreciated cost" or accounts No. 515 "Bills of exchange, estimated on depreciated cost";

on the amount of negative difference between depreciated cost and fair value of debt securities for date of reclassification:

The debit of the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or accounts No. 513 "Bills of exchange, estimated at fair value through other comprehensive income"

The account No. 10603 credit "Positive revaluation of the securities estimated at fair value through other comprehensive income";

on the amount of positive difference between depreciated cost and fair value of debt securities for date of reclassification:

The debit of the account No. 10605 "Negative revaluation of the securities estimated at fair value through other comprehensive income"

The account No. 502 credit "The debt securities estimated at fair value through other comprehensive income" or accounts No. 513 "Bills of exchange, estimated at fair value through other comprehensive income";

on the reserve amount on possible losses:

Debit of the account No. 50427 "Reserves on possible losses" or account No. 51525 "Reserves on possible losses"

Account No. 10630 credit "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 10635 "Adjustment of reserves on possible losses"

Account No. 51528 credit "Adjustment of reserves on possible losses" or

Debit of the account No. 51529 "Adjustment of reserves on possible losses"

Account No. 10634 credit "Adjustment of reserves on possible losses".

EPS as a result of reclassification is not adjusted.";

in subitem 5.7.2:

the eleventh to state the paragraph in the following edition:

"When carrying out reclassification of debt securities from category estimated on depreciated cost at category estimated at fair value through profit or loss the reserve amount on possible losses and adjustments of reserve on possible losses it is written off in correspondence with accounts on accounting of the income or expenses.";

add with new paragraphs of the following content:

"When carrying out reclassification of bills of exchange from category estimated on depreciated cost at category estimated at fair value through profit or loss credit institution performs transfer of the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on the reserve amount on possible losses:

Debit of the account No. 51525 "Reserves on possible losses"

Account No. 51240 credit "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 51238 "Adjustment of reserves on possible losses"

Account No. 51528 credit "Adjustment of reserves on possible losses" or

Debit of the account No. 51529 "Adjustment of reserves on possible losses"

Account No. 51239 credit "Adjustment of reserves on possible losses".".

1.3. To state subitem 6.5.3 of Item 6.5 in the following edition:

"6.5.3. In case of disposal (realization) of securities of the amount of revaluation, the disposed (implementable) securities having on (according to the chosen cost evaluation method), are written off according to subitem 8.5.6 of Item 8.5 of this provision.".

1.4. Add with Item 6.5 (1) the following content:

"6.5 (1). Forming of reserves on possible losses on the securities and bills estimated at fair value through other comprehensive income is performed according to the procedure, provided by the Provision of the Bank of Russia No. 611-P, the Provision of the Bank of Russia No. 590-P.

6.5 (1).1. Forming of reserve on possible losses according to the debt securities and bills of exchange estimated at fair value through other comprehensive income is reflected accounting entry:

The debit of the account No. 70606 "Expenses" (in OFR on symbols of the Section 7 "Expenses on Forming of Reserves on Possible Losses" of part 3 "Interest expenses, expenses from adjustments and expenses on forming of reserves on possible losses")

Account No. 10630 credit "Reserves on possible losses".

6.5 (1).2. Recovery (reduction earlier added) reserve on possible losses according to the debt securities and bills of exchange estimated at fair value through other comprehensive income is reflected accounting entry:

Debit of the account No. 10630 "Reserves on possible losses"

The account No. 70601 credit "Income" (in OFR on symbols of the Section 5 "Income from Recovery (Reduction) of Reserves by Possible Losses" of part 1 "Interest incomes, the income from adjustments and from recovery (reduction) of reserves by possible losses").

6.5 (1).3. Forming of reserve on possible losses according to the equity securities estimated at fair value through other comprehensive income is reflected accounting entry:

The debit of the account No. 70606 "Expenses" (in OFR on symbols of the Section 7 "Other Operating Expenses" of part 4 "Operating expenses")

Account No. 50719 credit "Reserves on possible losses".

At the same time on the amount of the created reserve on possible losses according to the equity securities estimated at fair value through other comprehensive income accounting entry is performed:

Debit of the account No. 50738 "Adjustment of reserves on possible losses"

The account No. 70601 credit "Income" (in OFR on symbols of the Section 8 "Other Operating Incomes" of part 2 "Operating incomes")".

1.5. To state paragraph two of Item 6.6 in the following edition:

"According to equity securities according to which the credit institution in case of initial recognition made the decision which is not subject to cancellation to reflect changes of fair value as a part of other comprehensive income provisions under the expected credit losses are not created.".

1.6. State Item 6.8 in the following edition:

"6.8. When carrying out reclassification of debt securities and bills of exchange from category estimated at fair value through other comprehensive income at category estimated on depreciated cost credit institution performs value adjustment of securities and bills of exchange for the amount of the revaluation which is saved up as a part of other comprehensive income, and transfer of cost of securities, the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on the amount of negative revaluation of securities:

The debit of the account of the second procedure on accounting of revaluation opened to the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or the account No. 513 "Bills of exchange, estimated at fair value through other comprehensive income"

The account No. 10605 credit "Negative revaluation of the securities estimated at fair value through other comprehensive income";

on the amount of positive revaluation of securities:

The debit of the account No. 10603 "Positive revaluation of the securities estimated at fair value through other comprehensive income"

The credit of the account of the second procedure on accounting of revaluation opened to the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or the account No. 513 "Bills of exchange, estimated at fair value through other comprehensive income";

on the corrected cost of securities:

The debit of the account No. 504 "The debt securities estimated on depreciated cost" or accounts No. 515 "Bills of exchange, estimated on depreciated cost"

The account No. 502 credit "The debt securities estimated at fair value through other comprehensive income" or accounts No. 513 "Bills of exchange, estimated at fair value through other comprehensive income";

on the reserve amount on possible losses:

Debit of the account No. 10630 "Reserves on possible losses"

Account No. 50427 credit "Reserves on possible losses" or account No. 51525 "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 10634 "Adjustment of reserves on possible losses"

Account No. 50431 credit "Adjustment of reserves on possible losses" or account No. 51529 "Adjustment of reserves on possible losses" or

Debit of the account No. 50430 "Adjustment of reserves on possible losses" or account No. 51528 "Adjustment of reserves on possible losses"

Account No. 10635 credit "Adjustment of reserves on possible losses".

EPS as a result of reclassification is not adjusted.".

1.7. Add Item 6.9 with new paragraphs of the following content:

"When carrying out reclassification of bills of exchange from category estimated at fair value through other comprehensive income at category estimated at fair value through profit or loss credit institution performs transfer of the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on the amount of reserves on possible losses:

Debit of the account No. 10630 "Reserves on possible losses"

Account No. 51240 credit "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 10634 "Adjustment of reserves on possible losses"

Account No. 51239 credit "Adjustment of reserves on possible losses" or

Debit of the account No. 51238 "Adjustment of reserves on possible losses"

Account No. 10635 credit "Adjustment of reserves on possible losses".

When carrying out reclassification of debt securities from category estimated at fair value through other comprehensive income at category estimated at fair value through profit or loss the reserve amount on possible losses and adjustments of reserve on possible losses it is written off in correspondence with accounts on accounting of the income or expenses.".

1.8. State Item 7.6 in the following edition:

"7.6. On the securities estimated at fair value through profit or loss (except bills of exchange, and also the shares and shares reflected in the balance sheet account on accounting of investments in affiliated and dependent joint-stock companies, mutual investment funds), reserves on possible losses and provisions under the expected credit losses are not created.".

1.9. Add with Item 7.6 (1) the following content:

"7.6 (1). Forming of reserves on possible losses on the bills of exchange, and also the shares and shares reflected in the balance sheet account on accounting of investments in affiliated and dependent joint-stock companies, mutual investment funds, estimated at fair value through profit or loss is performed according to the procedure, provided by the Provision of the Bank of Russia No. 611-P, the Provision of the Bank of Russia No. 590-P.

Forming of reserve on possible losses on the bills of exchange, and also the shares and shares reflected in the balance sheet account on accounting of investments in affiliated and dependent joint-stock companies, mutual investment funds, estimated at fair value through profit or loss is reflected accounting entry:

The debit of the account No. 70606 "Expenses" (in OFR on symbols of the Section 7 "Other Operating Expenses" of part 4 "Operating expenses")

Account No. 51240 credit "Reserves on possible losses" or account No. 60105 "Reserves on possible losses".

At the same time on the amount of the created reserve on possible losses on the bills of exchange, and also the shares and shares reflected in the balance sheet account on accounting of investments in affiliated and dependent joint-stock companies, mutual investment funds, estimated at fair value through profit or loss accounting entry is performed:

Debit of the account No. 51238 "Adjustment of reserves on possible losses" or account No. 60107 "Adjustment of reserves on possible losses"

The account No. 70601 credit "Income" (in OFR on symbols of the Section 8 "Other Operating Incomes" of part 2 "Operating incomes")".

1.10. State Items 7.8 and 7.9 in the following edition:

"7.8. When carrying out reclassification of debt securities and bills of exchange from category estimated at fair value through profit or loss at category estimated on depreciated cost credit institution performs transfer of cost of debt securities or bills of exchange accounting entries:

The debit of the account No. 504 "The debt securities estimated on depreciated cost" or accounts No. 515 "Bills of exchange, estimated on depreciated cost"

The account No. 501 credit "The debt securities estimated at fair value through profit or loss" or accounts No. 512 "Bills of exchange, estimated at fair value through profit or loss";

on the amount of positive revaluation of securities:

The debit of the account No. 504 "The debt securities estimated on depreciated cost" or accounts No. 515 "Bills of exchange, estimated on depreciated cost"

The credit of the account of the second procedure on accounting of revaluation opened to the account No. 501 "The debt securities estimated at fair value through profit or loss" or the account No. 512 "Bills of exchange, estimated at fair value through profit or loss";

on the amount of negative revaluation of securities:

The debit of the account of the second procedure on accounting of revaluation opened to the account No. 501 "The debt securities estimated at fair value through profit or loss" or the account No. 512 "Bills of exchange, estimated at fair value through profit or loss"

The account No. 504 credit "The debt securities estimated on depreciated cost" or accounts No. 515 "Bills of exchange, estimated on depreciated cost".

EPS is determined on the basis of fair value of securities for date of reclassification.

When carrying out reclassification of bills of exchange from category estimated at fair value through profit or loss at category estimated on depreciated cost credit institution performs transfer of the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on the amount of reserves on possible losses:

Debit of the account No. 51240 "Reserves on possible losses"

Account No. 51525 credit "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 51528 "Adjustment of reserves on possible losses"

Account No. 51238 credit "Adjustment of reserves on possible losses".

Financial accounting of provision under the expected credit losses on the bills of exchange estimated on depreciated cost is performed according to Item 11.8 of this provision.

7.9. When carrying out reclassification of securities and bills of exchange from category estimated at fair value through profit or loss at category estimated at fair value through other comprehensive income credit institution performs transfer of cost of securities or bills of exchange accounting entries:

The debit of the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or accounts No. 513 "Bills of exchange, estimated at fair value through other comprehensive income"

The account No. 501 credit "The debt securities estimated at fair value through profit or loss" or accounts No. 512 "Bills of exchange, estimated at fair value through profit or loss";

on the amount of positive revaluation of securities:

The debit of the account of the second procedure on accounting of revaluation opened to the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or to the account No. 513 "Bills of exchange, estimated at fair value through other comprehensive income"

The credit of the account of the second procedure on accounting of revaluation opened to the account No. 501 "The debt securities estimated at fair value through profit or loss" or to the account No. 512 "Bills of exchange, estimated at fair value through profit or loss";

on the amount of negative revaluation of securities:

The debit of the account of the second procedure on accounting of revaluation opened to the account No. 501 "The debt securities estimated at fair value through profit or loss" or to the account No. 512 "Bills of exchange, estimated at fair value through profit or loss"

The credit of the account of the second procedure on accounting of revaluation opened to the account No. 502 "The debt securities estimated at fair value through other comprehensive income" or to the account No. 513 "Bills of exchange, estimated at fair value through other comprehensive income".

EPS is determined on the basis of fair value of securities for date of reclassification.

When carrying out reclassification of bills of exchange from category estimated at fair value through profit or loss at category estimated at fair value through other comprehensive income credit institution performs transfer of the amounts of the created reserves on possible losses and adjustments of reserves on possible losses by accounting entries:

on the amount of reserves on possible losses:

Debit of the account No. 51240 "Reserves on possible losses"

Account No. 10630 credit "Reserves on possible losses";

on the amount of adjustments of reserves on possible losses:

Debit of the account No. 10635 "Adjustment of reserves on possible losses"

Account No. 51238 credit "Adjustment of reserves on possible losses".

Financial accounting of provision under the expected credit losses on the bills of exchange estimated at fair value through other comprehensive income is performed according to Item 11.9 of this provision.".

1.11. State Items 11.9 and 11.10 in the following edition:

"11.9. Calculation of provision under the expected credit losses according to the debt securities and bills of exchange estimated at fair value through other comprehensive income and which are not for date of assessment credit depreciated is performed according to Items 11.2 and 11.3 of this provision.

Calculation of provision under the expected credit losses according to the credit depreciated debt securities and bills of exchange estimated at fair value through other comprehensive income and which are not credit depreciated in case of initial recognition, is performed according to Item 11.4 of this provision.

Adjustment (increase) of the created reserve at possible losses up to the provision amount under the expected credit losses according to the debt securities and bills of exchange estimated at fair value through other comprehensive income is reflected accounting entry:

The debit of the account No. 70606 "Expenses" (in OFR on symbols of the Section 8 "The Adjustments Increasing Interest Expenses on Difference between Provisions under the Expected Credit Losses and Reserves on Possible Losses" of part 3 "Interest expenses, expenses from adjustments and expenses on forming of reserves on possible losses")

Account No. 10634 credit "Adjustment of reserves on possible losses".

Adjustment (reduction) of the created reserve by possible losses to the provision amount under the expected credit losses according to the debt securities and bills of exchange estimated at fair value through other comprehensive income is reflected accounting entry:

Debit of the account No. 10635 "Adjustment of reserves on possible losses"

The account No. 70601 credit "Income" (in OFR on symbols of the Section 7 "The Adjustments Increasing Interest Incomes on Difference between Reserves on Possible Losses and Provisions under the Expected Credit Losses" of part 1 "Interest incomes, the income from adjustments and from recovery (reduction) of reserves by possible losses").

11:10. In case of reclassification of separate financial asset or several financial assets, calculation of provision under the expected credit losses concerning which was perfromed on group basis, write-off of provision under the expected credit losses is performed in the amount determined by credit institution based on professional judgment.".

2. This Instruction becomes effective after 10 days after day of its official publication.

 

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