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Ministry of Justice of Ukraine

January 18, 2006

No. 40/11914

RESOLUTION OF BOARD OF THE NATIONAL BANK OF UKRAINE

of December 20, 2005 No. 480

About approval of the Instruction for financial accounting of fixed assets and intangible assets of bank of Ukraine

(as amended on 13-01-2020)

According to article 41 of the Law of Ukraine "About the National Bank of Ukraine", article 68 of the Law of Ukraine "About banks and banking activity" the Board of the National Bank of Ukraine DECIDES:

1. Approve the Instruction for financial accounting of fixed assets and intangible assets of banks of Ukraine it (is applied).

2. Declare invalid the resolution of Board of the National Bank of Ukraine of 11.12.2000 No. 475 "About approval of the Instruction for financial accounting of fixed assets and intangible assets of banks of Ukraine", registered in the Ministry of Justice of Ukraine 28.12.2000 for No. 960/5181 (with changes).

3. To accounting department (Rychakovskaya V. I.) after state registration in the Ministry of Justice of Ukraine to bring contents of this resolution to the attention of territorial administrations of the National Bank of Ukraine and banks of Ukraine for management and use in work.

4. To impose control over the implementation of this resolution on chiefs of territorial administrations of the National Bank of Ukraine.

5. The resolution becomes effective since February 1, 2006.

Chairman

V. S. Stelmakh

 

Approved by the Resolution of Board of the National Bank of Ukraine of December 20, 2005 No. 480

Instruction for financial accounting of fixed assets and intangible assets of banks of Ukraine

Section I. General provisions

Chapter 1. Basic provisions

1.1. This Instruction determines the methodological principles of forming in financial accounting of information on transactions with fixed assets, other non-current tangible assets (further - fixed assets) and with intangible assets of banks of Ukraine.

1.2. The instruction is developed according to the Civil code of Ukraine, the Laws of Ukraine "About banks and banking activity", "About the National Bank of Ukraine", other legal acts of Ukraine, regulatory legal acts of the National Bank of Ukraine (further - National Bank) and the main requirements of international accounting standards.

1.3. This Instruction does not regulate procedure for display in financial accounting of the accrued (paid) taxes on transactions with non-current assets.

1.4. In this Instruction terms are used in such value:

1) asset with right to use - the asset representing the right of the lessee to use underlying asset during lease term;

2) depreciation - systematic distribution of cost of fixed assets and intangible assets which will be amortized, during the term of their useful use (operation);

3) underlying asset - leased asset and which right to use is transferred by the lessor to the lessee;

4) book value - the amount on which the asset is considered in balance after deduction of any accumulated depreciation and accumulated losses from reduction of its usefulness;

5) gross investment in lease - the amount of lease payments which shall be received by the lessor in case of the finance lease and any non-quaranteed salvage value added to the lessor;

6) the cost which will be amortized, - original or revaluated value of fixed assets or intangible assets less their salvage value;

7) guarantee of salvage value - the guarantee provided to the lessor by the party which is not connected with the lessor concerning the fact that cost (or part of cost) underlying asset for the end of lease, at least, is equal to the specified amount;

8) group of fixed assets or intangible assets - set same on technical characteristics, appointment and conditions of use of fixed assets or intangible assets;

9) the date of entry into force of modification - date as of which both parties agreed to lease modification;

10) lease effective date - earlier of two dates: either date of the tenancy agreement, or date of the obligation when the parties came to the agreement concerning the main lease term;

11) start date of lease - date when the lessor provides underlying asset for use by the lessee;

12) date of acquisition - date to which control of assets which are bought passes to the buyer;

13) cash equivalents - short-term highly liquid financial investments which are freely converted into certain amounts of money and are characterized by insignificant risk of change of their cost;

14) residual cost - difference between the original (overpriced) cost and the amount of the added depreciation;

15) variable lease payments - share of the payments made by the lessee for benefit of the lessor for the right to use underlying asset during lease term which changes owing to change of the facts or circumstances which occur after start date of lease, except current of time;

16) depreciation of fixed assets - depreciation amount of fixed asset object since the beginning of its useful use;

17) the investment real estate - the real estate (the earth or the building, either part of the building, or their combination) withheld (the owner or the lessee as asset with right to use) for the purpose of receipt of lease payments or value addition of the capital or for achievement of both purposes, but not for:

uses in production or deliveries of goods, provision of services or for the administrative purposes; or

sales in the course of ordinary activities;

18) the class of underlying asset is group of the underlying assets having the similar nature and method of use;

19) short-term lease - lease which on start date of lease has lease term of 12 months or less. Lease which contains possibilities of acquisition is not short-term lease;

20) salvage value of asset - previously estimated amount which the subject of managing would receive from asset retirement after deduction of all previously estimated costs for its disposal at the moment if the asset is obsolete and is in the condition expected after the termination of term of its useful operation;

21) lease modification - scope change of lease or compensation for lease which was not part of entry conditions of lease (for example, additional inclusion or the termination of the right to use one or more underlying assets, either prolongation or reducing lease term under the agreement);

22) cumulative depreciation of intangible assets - depreciation amount of object of intangible assets since the beginning of its useful use;

23) non-quaranteed salvage value - part of salvage value of underlying asset which realization by the lessor is not guaranteed or guaranteed only by the party connected with the lessor;

24) unearned finance income - difference between gross investment in lease and net investment in lease;

25) intangible asset - the non-monetary asset which has no material form is not the withheld money and assets which shall be received in the fixed or certain amount of money, and can be identified;

26) non-current assets - fixed assets (non-current tangible assets) and intangible assets;

27) the non-current assets withheld for sale - the non-current assets withheld with sales objective, and their book value will be recovered by transaction on sale, but not the current use;

28) the real estate occupied by the owner - the real estate withheld (the owner or the lessee as asset with right to use) for use in production or delivery of goods or rendering services or for the administrative purposes;

29) fixed asset object - the finished device with all devices and accessories to it or the separate structurally isolated subject intended for accomplishment of certain independent functions, or the isolated complex of structurally connected objects of one or of different function, having general devices, accessories, management and the single base for their servicing owing to what each subject can perform the functions, and complex - certain work only as a part of complex, but not independently, also other asset corresponding to determination of fixed assets or part of such asset which is controlled by bank. If one fixed asset object consists of the parts having various useful life (operation), then each of these parts can be recognized financial accounting as separate fixed asset object;

30) lease - the agreement or part of the agreement which transfers the right to use asset (underlying asset) during the certain period in exchange for compensation;

31) lease payments - the payments made by the lessee for benefit of the lessor, connected with right to use of underlying asset during lease term;

32) fixed assets - tangible assets which the bank holds for the purpose of use them in the course of the activities, provision of services, delivery in leasing (lease) to other persons or for implementation of administrative and welfare functions which expected useful life (operation) is more than one year (or operating cycle if it is longer, than year);

33) original cost - historical (actual) cost of fixed assets or intangible assets in cash amount or fair value of other assets, the paid fixed assets (transferred), spent for acquisition (creation) or intangible assets;

34) initial direct costs - the additional costs incurred in connection with the conclusion of lease which would be not incurred if such lease it would not be concluded, except for such expenses incurred by the manufacturing lessor or the lessor dealer in connection with finance lease;

35) revaluated value - the cost of fixed assets or intangible assets after their revaluation;

36) maintenance of fixed asset object or intangible assets in working order - expenses on maintenance of object in working order (suitable for use) and receipt of originally certain amount of future economic benefits from its use;

37) similar objects - the objects having identical functional purpose and identical fair value;

38) improvement of fixed asset object - the expenses connected with upgrade, modification, completion, additional equipment, reconstruction and so forth of fixed asset object therefore the future economic benefits which are originally expected from its use increase;

39) admissible rate of percent - percent rate thanks to which this cost of lease payments and non-quaranteed salvage value equals to the amount of fair value of underlying asset and initial direct costs of the lessor;

40) market value - the amount which can be received from sale of asset in the active market;

41) rate of additional borrowings of the lessee - percent rate which the lessee would pay to lend for similar term and with similar providing means, necessary to receive asset, at cost similar to asset with right to use on similar economic conditions;

42) incentives to lease - the payments made by the lessor for benefit of the lessee, connected with lease, either compensation or capture on themselves the lessor of expenses of the lessee;

43) useful life (operation) - the expected period of time during which fixed assets or intangible assets will be used by bank or with their use will be made the production volume (works, services) expected by bank (is executed);

44) lease term is trouble-free the period during which the lessee has the right to use underlying asset;

45) the sublease - transaction in which the underlying asset is again leased further by the lessee ("the intermediate lessor") to the third party and lease ("the main lease") between the main lessor and the lessee remains in force;

46) the amount of the expected compensation of non-current asset - the greatest of two estimates, namely net value of realization or present cost of future net cash receipts from use of non-current asset, including its salvage value;

47) present cost - the discounted amount of future payments (less the amount of the expected compensation) which, as expected, will be required for repayment of the obligation in case of the current activities of bank;

48) this cost of future payment under certain percent is the amount which needs to be enclosed under certain percent for receipt of the corresponding amount in the future now;

49) enhancement of intangible assets - the expenses connected with enhancement of intangible assets and increase in their opportunities and term of use which will promote increase in originally expected future economic benefits;

50) fixed payments - the payments made by the lessee for benefit of the lessor for the right to use underlying asset during lease term, except for variable lease payments;

51) net investment in lease - the gross investment in lease discounted at the admissible rate of percent in lease;

52) the net value of realization of non-current asset - fair value of non-current asset less the expected expenses on its realization.

Other terms which are used in this Instruction are used in the values determined by legal acts of Ukraine, regulatory legal acts of National Bank, international accounting standards.

1.5. This Instruction regulates display in financial accounting of typical transactions of banks with non-current assets. Banks shall perform financial accounting of transactions with non-current assets which are not determined by this Instruction according to internal operational procedures (rules) developed taking into account requirements of the legislation of Ukraine and international accounting standards.

1.6. Accounting of fixed asset objects and intangible assets is conducted using source documents, stipulated by the legislation Ukraine.

The procedure for conducting analytics of fixed assets and intangible assets and creation of source documents is determined according to accounting policy of bank with observance of requirements of the legislation of Ukraine.

1.7. The asset sale with payment deferral in financial accounting is displayed according to requirements the Instruction for financial accounting of financial instrument transactions in banks of Ukraine approved by the resolution of Board of the National Bank of Ukraine of February 21, 2018 No. 14 (further - the Instruction 14).

Chapter 2. The accounts used for accounting of transactions of banks of Ukraine with fixed assets and intangible assets

2.1. Financial accounting of transactions with fixed assets and intangible assets is performed according to balance and off-balance sheet accounts of the Chart of accounts of the financial accounting of banks of Ukraine approved by the resolution of Board of the National Bank of Ukraine of September 11, 2017 No. 89 (with changes) (further - the Chart of accounts) (appendix).

2.2. For accounting of assets of the Fixed assets group accounts 4400, 4409 are used. Including on these accounts real estate objects which belong to the real estate category occupied by the owner are considered.

2.3. Assets of the "Other Non-current Tangible Assets" group are considered on accounts 4500, 4509.

2.4. Accounting of non-current assets which are classified as the investment real estate is performed on accounts 4410, 4419.

2.5. The non-current assets containing for sale are considered on account 3408.

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