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Ministry of Justice of Ukraine

May 26, 2006

No. 610/12484


of April 28, 2006 No. 415

About approval of the Provision (standard) of financial accounting 31 "Financial expenses"

(The last edition from 14-07-2014)

According to article 6 of the Law of Ukraine "About financial accounting and the financial reporting in Ukraine" PRIKAZYVAYU:

1. Approve the Provision (standard) of financial accounting 31 "Financial expenses" approved by Methodological council on financial accounting under the Ministry of Finance of Ukraine it (is applied).

2. To provide to management of methodology of financial accounting (Parkhomenko V. M.) submission of this order in accordance with the established procedure on state registration in the Ministry of Justice of Ukraine.

3. To department of ensuring activities of the Minister (foster service) (Marnenko I. I.) after state registration of this order to provide its publication in mass media.

4. The specified Provision (standard) becomes effective since 01.01.2007.



V. Pinzenik

Approved by the Order of the Ministry of Finance of Ukraine of April 28, 2006 No. 415

Provision (standard) of financial accounting 31 "Financial expenses"

General provisions

1. This Provision (standard) determines the methodological principles of forming in financial accounting of information on financial expenses and its disclosures in the financial reporting.

2. Regulations of this Provision (standard) are applied by the companies, the organizations, 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. The terms used in provisions (standards) of financial accounting have the following value:

Borrowing - loans, bills of exchange, bonds, and also other types of short-term and long-term obligations on which percent are charged.

Capitalization of financial expenses - inclusion of financial expenses in cost of qualification asset.

Qualification asset - the asset which is surely requiring essential time for its creation.

Capitalization rate of financial expenses - private from division of weighted average of financial expenses and amounts of all outstanding loan (except those which are directly connected with qualification asset or have purpose) the companies during the accounting period.

Cost of qualification asset - expenses on acquisition, construction, creation, production, production, cultivation and reduction of qualification asset in condition in which it is suitable for use with the planned purpose or sales (further - expenses on creation of qualification asset).

Financial expenses - expenses on the percent and other expenses of the company connected with loan.

4. Financial expenses are recognized:

small business entities - legal entities, representative offices of foreign business entities and legal entities who are not engaged in business activity (except budgetary institutions) expenses of that accounting period for which they were added (are recognized as obligations);

other legal entities expenses of that accounting period for which they were added (are recognized as obligations), except financial expenses which are capitalized.

5. Capitalization of financial expenses is applied only to the amounts of those financial expenses which it would be possible to avoid if expenses on creation of qualification asset were not performed.

Expenses on creation of qualification asset for the purposes of capitalization include only expenses for which implementation money is paid, other assets are transferred or obligations with charge of percent are assumed.

Expenses on creation of qualification asset for the purposes of capitalization decrease by the amount of any received intermediate payments and target financing which is directly connected with creation of qualification asset.

Examples of qualification assets are given in appendix 1 to this Provision (standard).

Capitalization of financial expenses

6. In case of direct loan of means for the purpose of creation of qualification asset the amount of financial expenses which is subject to inclusion in cost of qualification asset are the actual, recognized in the accounting period, financial expenses which are connected with this loan (less the income from temporary financial investment of borrowed funds).

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