ORDER OF THE MINISTRY OF FINANCE OF UKRAINE

of May 28, 1999 No. 137

About approval of the National provision (standard) of financial accounting

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 financial accounting 6 "Error correction and changes in financial statements" (further - the Provision (standard) 6) approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine which is applied.

2. Determine that the specified National provision (standard) 6 is applied to accounting records concerning transactions which happen since 2000.

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) 6.

 

Approved by the Order of the Ministry of Finance of Ukraine of May 28, 1999 No. 137

National provision (standard) of financial accounting 6 "Error correction and changes in financial statements"

General provisions

1. This National provision (standard) determines procedure for error correction, introduction and disclosure of other changes in the financial reporting.

2. Regulations of this National provision (standard) are applied in the financial reporting of the companies, organizations and other legal entities (further the companies) all patterns of ownership (except budgetary institutions and the companies which according to the legislation constitute the financial reporting under International Financial Reporting Standards).

3. Terms which are used in national provisions (standards) of financial accounting make such sense:

Date of balance - date for which the balance of the company is made. Usually date of balance is the end of the last day of the accounting period.

Accounting estimates - monetary value of financial statement elements which do not give in to direct observation and are determined approximately, that is are previously estimated.

Examples of accounting estimates are:

reserve of doubtful debts;

net value of realization of stock unit;

fair value of assets or liabilities;

amount of charged depreciation of fixed asset object;

providing on accomplishment of warranty obligations.

Assessment determination of sums of money on which financial statement elements shall be recognized and be reflected.

Event after date of balance - event which takes place between date of balance and approval date management of the financial reporting prepared to the bringing to publicity which affected or can affect financial condition, results of activities and cash flow of the company.

Error correction and changes in accounting estimates

4. Error correction, the financial statements allowed in case of creation in previous years, is performed by adjustment of balance of retained earnings for the beginning of accounting year if such mistakes influence the size of retained earnings (uncovered loss).

5. Error correction which belong to previous periods requires repeated display of the relevant comparative information in the financial reporting.

6. Accounting assessment can be reviewed if circumstances on which this assessment was based change, or the additional information is obtained. In character change in accounting assessment does not concern previous periods and is not correction of mistake.

7. If change in accounting assessment leads to changes in assets, obligations or equity, it is recognized by adjustment of book value of the corresponding asset, the obligation or equity in the period when there was change.

8. Consequences of change of accounting estimates should be included in the report on financial results in that period in which change took place, as well as in subsequent periods if change influences these periods.

 

Changes in accounting policy

9. Accounting policy can change only if authorized requirements, requirements of body which approves national provisions (standards) of financial accounting change, or if changes provide reliable display of events or transactions in the financial reporting of the company.

10. Establishment of accounting policy is not considered change of accounting policy for:

10.1. Events or transactions which differ on content from the previous events or transactions.

10.2. Events or transactions which did not happen earlier.

11. Accounting policy is applied concerning events and transactions from the moment of their origin, except as specified, provided by item 13 of this National provision (standard).

12. Influence of change of accounting policy on events and transactions of the expired periods is displayed in the reporting in the way:

12.1. Adjustments of balance of retained earnings for the beginning of accounting year.

12.2. Repeated provision of comparative information of rather previous accounting periods.

13. If the amount of adjustment of retained earnings for the beginning of accounting year cannot be determined authentically, then accounting policy extends only to events and transactions which happen after date of change of accounting policy.

14. If it is impossible to differentiate change of accounting policy and change of accounting estimates, then it is considered and displayed as change of accounting estimates.

 

Events after date of balance

15. Events after date of balance can require adjustment of certain Articles or disclosure of information on these events in notes to financial statements.

16. Events after date of balance which provide the additional information about determination of the amounts connected with conditions which existed for date of balance require adjustment of the corresponding assets and liabilities. Adjustment of assets and liabilities is performed by reversal and (or) additional records in accounting of the accounting period which display refining of assessment of the relevant articles owing to events after date of balance.

17. Events which take place after date of balance are specified conditions which arose after this date, do not need adjustment of articles of financial statements. Such events should be opened in notes to financial statements if lack of information on them affects capability of users of the reporting to do the corresponding estimates and to make decisions.

Dividends for the accounting period which are announced after date of balance should be opened in notes to financial statements.

18. If events after date of balance demonstrate intentions of the company to stop activities or about impossibility of its continuation, then the financial reporting is constituted without application of going concern principle.

19. The approximate list of events after date of balance is attached.

 

Disclosure of information in notes to financial statements

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