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IT IS REGISTERED

Ministry of Justice

Republic of Uzbekistan

On December 17, 2004 No. 1431

RESOLUTION OF BOARD OF CENTRAL BANK OF THE REPUBLIC OF UZBEKISTAN

of November 27, 2004 No. 25/5

About approval of the Regulations on procedure for conducting financial accounting of precious metals, stones and coins in commercial banks

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", the Board of the Central bank of the Republic of Uzbekistan decides:

1. Approve "Regulations on procedure for conducting financial accounting of precious metals, stones and coins in commercial banks" according to appendix.

2. This provision becomes effective after ten days from the moment of its state registration in the Ministry of Justice of the Republic of Uzbekistan.

 

Chairman

Central Bank M. Mullazhonov

Approved by the resolution of Board of the Central bank of the Republic of Uzbekistan of November 27, 2004 No. 25/5

Regulations on procedure for conducting financial accounting of precious metals, stones and coins in commercial banks

I. General provisions

1. 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 accounting treatment for precious metals, stones and coins in commercial banks of the Republic of Uzbekistan (further, in the text - banks) according to International accounting standards (further in the text - IFRS).

II. Determinations

2. For the purpose of this Provision the following terms are used:

net value of realization is estimated price of sale less the estimated costs which are necessary for sale implementation;

book value is actual cost less reserve of possible losses;

the FIFO method (the first receipt - the first leave) - accounting method which assumes that the inventory items which were purchased the first will be sold the first and respectively, the remained inventory items at the end of the period which were acquired later, and the rests will be considered respectively at the cost of later acquisition;

the method of weighted average cost - the cost of each Article is determined from weighted average cost of the similar items acquired during the period. Weighted average cost can periodically be calculated, or in process of receipt of each additional delivery, depending on work of bank.

III. Recognition and assessment

1. Recognition

3. Banks originally shall recognize precious metals, stones and coins on their actual cost. Actual cost includes the purchase costs and other costs incurred in the course of reduction of precious metals, stones and coins in their current status and location.

4. Purchase costs consist of the cost of purchase, customs payment, taxes and fees (except those which return to bank subsequently), and the transportation expenses, loading expenses and other expenses directly connected with acquisition of precious metals, stones and coins. Trade and other discounts, and also other similar items are subtracted in case of cost determination on purchase of precious metals, stones and coins.

5. Banks shall include the costs connected with acquisition in the cost of precious metals, stones and coins only in that amount in what they were actually suffered in case of reduction of precious metals, stones and coins in their current status and location.

6. Examples of costs which do not join in the cost of precious metals, stones and coins and are recognized quality of expenses of the period when they were suffered, are:

a) storage costs of precious metals, stones and coins;

b) administrative overheads which are not connected with reduction of precious metals, stones and coins in their current status and location;

c) costs for safety; and

d) costs to sell of precious metals, stones and coins.

7. The bank can buy precious metals, stones or coins on the terms of deferred payment. If the financing element is involved in such agreement, for example, there is difference between purchase price in case of usual conditions of crediting and paid amount, then he is recognized quality of interest expenses throughout the purchase financing period.

8. The cost of the precious metals, stones or coins received as a result of transition of pledged property to the order of bank or by means of other partial or complete loan repayment is equal to the smallest of the following sizes:

a) balance sheet credit amount or part of the credit, less reserve of possible losses, or

b) net value of realization of precious metals, stones or coins for date of their obtaining by bank in case of repayment or partial loan repayment.

2. Cost determination

9. The cost of separate precious metals, stones or coins which are usually not equivalent is established by special determination of their separate costs. In this case special costs on value assessment of separate precious metals or separate stone or coin arise in connection with determination of each separate unit of precious metals or each stone or coin. These costs by assessment increase the cost of precious metals or each stone or coin.

10. Special determination of costs is not required if all available units of precious metals, stones or coins, are usually equivalent. Under such circumstances cost is established by the FIFO method (the first receipt - the first leave) or by means of formula of weighted average cost.

11. Bank in the right to independently choose accounting method of precious metals, stones or coins by the FIFO method or weighted average cost. Banks shall use consistently the same formula of assessment concerning all inventories of precious metals, stones or coins.

12. The FIFO method implies that precious metals, stones and coins which were purchased the first are on sale the first, and subsequently the precious metals, stones and coins which remained in inventories at the end of the period is considered at the price of the corresponding last acquisitions (the appendix N1 and N 2).

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