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Ministry of Justice of Ukraine

January 20, 2011

No. 89/18827

Approved by the Order of the Ministry of Finance of Ukraine of December 24, 2010 No. 1629

National provision (standard) of financial accounting in public sector 124th "Income"

(as amended on 13-06-2017)

I. General provisions

1. This National provision (standard) determines the methodological principles of forming in financial accounting of information on the income from exchange and not exchange transactions.

2. Regulations of this National provision (standard) are applied by subjects of financial accounting in public sector (further - subjects of public sector).

3. This National provision (standard) does not extend to recognition and assessment of the income which are determined in other national provisions (standards) of financial accounting in public sector, in particular connected with:

lease agreements;

and are considered by dividends which belong by results of financial investments by method of equity participation;

sale or changes in fixed asset cost and intangible assets;

changes in fair value of financial assets and financial liabilities or their liquidation;

changes in value of other current assets;

changes in value of biological assets;

mining.

4. Terms which are used in national provisions (standards) of financial accounting in public sector have such value:

the budget assignment - the power of the subject of public sector conferred according to budget setting on capture of budget commitment and implementation of payments which has quantitative, temporary and target restrictions;

percent - payment for use of money, their equivalents or the amounts, which zadolzhena to the subject of public sector;

accounts receivable - outstanding amount of the subject of public sector for certain date which results from exchange and not exchange transactions;

dividends - the part of net profit distributed between participants (owners) according to share of their equity participation of the company;

not exchange transaction is economic activity which does not provide transfer of assets, services (works) in exchange for the gained income or assets, but can provide accomplishment of certain conditions;

exchange transaction is economic activity on sale/acquisition of assets in exchange for money, services (work), other assets or to repayment of obligations;

tax event - event which demonstrates approach of the tax liabilities;

royalty - the payments of any kind received as remuneration for use or for provision of the right to use of object of intellectual property right;

transfers - the means received from budgets of all levels from other states or the international organizations on unpaid and irretrievable basis;

purpose of the transferred assets - conditions which limit or determine the purposes of use of the transferred assets.

II. Classification of the income and its recognition

1. The income of subjects of public sector is classified in financial accounting by such groups:

1.1. Income from exchange transactions:

budget assignment;

income from rendering services (performance of works): service fee, provided by budgetary institutions according to their main activities; receipts of budgetary institutions from additional (economic) activities;

income from sale (income from capital transactions, income from sale of real estate);

interest gains, royalty and dividends;

other income from exchange transactions.

1.2. Income from not exchange transactions:

tax revenues;

non-tax receipts (charges and payments);

transfers and means which receive budgetary institutions from the companies, the organizations, physical persons and from other budgetary institutions for accomplishment of target actions;

receipts in the state trust funds;

obligations which are not subject to repayment.

2. The income from exchange transactions is recognized such procedure:

2.1. Such receipts are not recognized the income from exchange transactions:

2.1.2. Tax amounts on value added, the excise tax, other tax revenues which are subject to budget contribution and funds of obligatory national social insurance.

2.1.3. Advance payment amount (advance payment) in payment for goods, works, services.

2.1.4. Sum of earnest money under pledge or in repayment of budget advance (credit) in cases, stipulated by the legislation.

2.1.5. Receipts which belong to other persons.

2.2. The income is recognized if there is probability of receipt to the subject of public sector of the economic benefits or potential of usefulness connected with exchange transaction. The acknowledged income is not adjusted on that its part which is not paid by the buyer (the customer and so forth), with recognition of this amount expenses.

2.3. Budgetary appropriations are recognized the income in case of recognition of the incurred expenses connected with accomplishment by the subject of public sector of the powers determined by the legislation or receipt of asset, services (works) on accomplishment of the actions which are not connected with the main activities.

2.4. The income connected with provision of services (performance of works) is recognized proceeding from degree of completeness of transaction on provision of services (performance of works) for date of balance if the result of this transaction can be authentically estimated.

The result of transaction on provision of services (performance of works) can be authentically estimated in the presence of all stated below conditions:

possibilities of reliable assessment of the income;

probabilities of receipt of economic benefits from provision of services (performance of works);

possibilities of reliable assessment of degree of completeness of provision of services (performance of works) for date of balance;

possibilities of reliable expense estimation, performed for provision of services (performance of works) and necessary for their completion.

2.5. The income from asset sale is recognized if such conditions are met:

the subject of public sector gave to the consumer the substantial risks connected with control over asset;

the subject of public sector does not exercise further control and control of the sold asset;

the income amount can be determined authentically;

there is probability of receipt to the subject state sectors of economic benefits or potential of usefulness;

the expenses connected with sale can be determined authentically.

2.6. The income from sale is recognized by date of transfer of the substantial risks connected with control over asset.

2.7. The income in type of percent of royalty and dividends is recognized if:

there is probability of receipt to the subject state sectors of economic benefits or potential of usefulness;

the income amount can be authentically estimated.

Such income shall be recognized such procedure:

percent are recognized that accounting period to which they belong, proceeding from base of their charge and term of use of the corresponding assets;

royalty are recognized on accrual basis according to economic contents of the relevant agreement;

dividends are recognized the decision making period about their payment.

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