Ministry of Justice of Ukraine
February 11, 2000
of January 31, 2000 No. 20
About approval of the National provision (standard) of the financial accounting 11 "Obligations"
In pursuance of the Program of reforming of the system of financial accounting using international standards approved by the resolution of the Cabinet of Ministers of Ukraine of October 28, 1998 No. 1706, I ORDER:
1. Approve the National provision (standard) of the financial accounting 11 "Obligations" (further - the Provision (standard) 11) approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine which is applied.
3. Provide that other regulations of the Ministry of Finance of Ukraine on financial accounting are effective in part which does not contradict the National provision (standard) 11.
A. V. Litvin
Approved by the Order of the Ministry of Finance of Ukraine of January 31, 2000 No. 20
1. This National provision (standard) determines methodological bases of forming in financial accounting of information on the obligation and its disclosure in the financial reporting.
2. Regulations of this National provision (standard) are applied by the companies, the organizations and other legal entities (further - the companies) irrespective of patterns of ownership (except budgetary institutions and the companies which according to the legislation constitute the financial reporting under International Financial Reporting Standards).
3. This National provision (standard) is applied taking into account features of assessment and disclosure of information concerning the obligations established by other provisions (standards) of financial accounting.
4. Terms which are used in provisions (standards) of financial accounting have such value:
Long-term obligations - all obligations which are not the current obligations.
Providing - obligations with the uncertain amount or time of repayment for date of balance.
The unforeseen obligation is:
1) the obligation which can arise owing to last events and which existence will be confirmed only when takes place or will not take place one or more uncertain future events over which the company has no complete control; or
2) this obligation which arises owing to last events, but is not recognized as it is improbable that for settlement of the obligation it will be necessary to use resources which personify economic benefits or as the amount of the obligation cannot be determined authentically.
The burdensome contract - the contract, expenses (which cannot be avoided) on which accomplishment exceed the expected economic benefits from this contract.
The current obligations - obligations which will be extinguished during operating cycle of the company or shall be extinguished within twelve months, since date of balance.
Repayment sum - not discounted cash amount or their equivalents which, as expected, will be paid for repayment of the obligation in the course of regular activities of the company.
This cost - the discounted amount of future payments (less the amount of the expected compensation) which, as expected, will be necessary for repayment of the obligation in the course of regular activities of the company.
Recognition and assessment of the obligation
5. The obligation is recognized if its assessment can be authentically determined and there is probability of reduction of economic benefits in the future owing to its repayment. If for date of balance earlier recognized obligation is not subject to repayment, then its amount is included the income of the accounting period.
6. For the purpose of financial accounting of the obligation share on:
the paragraph the fourth Item 6 is excluded according to the Order of the Ministry of Finance of Ukraine of 27.06.2013 No. 627,
7. Treat long-term obligations:
long-term loans of banks;
other long-term obligations;
delayed tax liabilities;
8. Long-term obligation according to the credit agreement (if the agreement provides repayment of the obligation upon the demand of the creditor (creditor) in case of violation of the certain conditions connected with financial condition of the borrower), which conditions are violated, is considered long-term if:
the creditor before approval of the financial reporting agreed not to require repayment of the obligation owing to violation;
emergence of further violations of the credit agreement within twelve months from the date of balance is not expected.
9. Long-term obligations are displayed in balance at their this cost. Determination of this cost depends on conditions and obligation type.
10. The current obligations include:
short-term loans of banks;
the current accounts payable on long-term obligations, for goods, works, services, by calculations with the budget, including for the income tax, for calculations for insurance, for calculations for compensation, for settlings with participants, for calculations for internal settlements; the short-term bills of exchange issued;
other current obligations.
11. The current obligations are displayed in balance on repayment sum.
12. Providing are created for compensation of subsequent (future) operating expenses on:
payment of leaves to workers;
additional pension provision;
accomplishment of warranty obligations;
restructuring, accomplishment of obligations in case of the activities termination;
accomplishment of obligations of rather burdensome contracts and so forth.
The amounts of the created providing are recognized expenses (except for the providing amount which joins in primary fixed asset cost according to the National provision (standard) of the financial accounting 7 "Fixed assets".
13. Providing is created in case of origin owing to last events of the obligation which repayment most likely will lead to reduction of resources which personify economic benefits, and its assessment can be settlement is determined. It is forbidden to create providing for covering of anticipatory damages from activities of the company.
The providing amount on payment of leaves is determined monthly as the work actually of accrued payroll to workers and the percent calculated as the relation of the annual planned amount on payment of leaves to the general planned salary fund taking into account the corresponding amount of assignments on obligatory national social insurance.
14. Providing for expense recovery for restructuring is created in case of availability of the company of the restructuring plan approved by management with specific actions, terms of their accomplishment and expense amount which will be suffered, and after the beginning of implementation of this plan.
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