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Ministry of Justice of Ukraine

January 20, 2011

No. 93/18831

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 of 128th "Obligation"

(as amended on 27-01-2021)

I. General provisions

1. This National provision (standard) determines the methodological principles of forming in financial accounting of information on obligations, contingent obligations and contingent assets and and its disclosure in the financial reporting.

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 obligations, contingent obligations and contingent assets which are determined in other national provisions (standards) of financial accounting in public sector, and also on obligations of budgets of all levels for social payments and compensation of privileges.

4. The terms used in national provisions (standards) of financial accounting in public sector have the following value:

the current obligations - obligations which correspond to any of criteria:

a) as expected, will be extinguished during operating cycle;

b) are subject to repayment within twelve months after date of balance; or

c) the subject of public sector has no unconditional right to delay repayment of the obligation for at least twelve months after date of balance;

long-term obligations - all obligations which are not the current obligations;

the contingent asset - possible asset which results from last events and which existence will prove to be true only after occurs or will not occur one or several uncertain future events over which the subject of public sector has no complete control;

contingent obligation is:

1) the possible obligation which results from last events and which existence will prove to be true only after occurs or will not happen one or several uncertain future events over which the subject of public sector has no complete control; or

2) this obligation which results from last events, but is not recognized as it is improbable that for repayment of the obligation it will be necessary to use the resources personifying economic benefits or potential of usefulness or as the amount of the obligation cannot be estimated authentically;

repayment sum - not discounted cash amount or their equivalents which, as expected, will be paid for repayment of the obligation.

II. Recognition and assessment of the obligation

1. The obligation is recognized if its assessment can be authentically determined and there is probability of reduction of economic benefits or potential of usefulness in the future as a result of 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.

2. For the purpose of financial accounting of the obligation are divided on:

long-term;

current;

contingent obligations;

deferred revenues.

3. The obligation should be considered as current if it is subject to repayment within twelve months from the date of balance even if the initial term of repayment was more than twelve months and there is agreement signed after date of balance and before approval of the financial reporting on renewal of this obligation on long-term.

If the subject of public sector has the right and intends to delay repayment of the obligation for at least twelve months after date of balance according to the existing credit agreement, such obligation should be considered as long-term even if the term of its repayment comes earlier.

4. If the borrower for date of the reporting or violates earlier obligations according to long-term credit agreements therefore the obligation is subject to payment on demand, the obligation is classified as current even if the creditor agreed, after date of balance not to require payment as a result of violation. The obligation is classified as current because the subject of public sector has no unconditional right to delay its repayment for at least twelve months after this date to date of balance.

The obligation is classified as long-term if for date of balance there is consent of the creditor to provide the grace period which is coming to an end at least in twelve months after date of balance during which the borrower can correct violation and the creditor cannot require immediate payment.

5. Obligations are displayed in balance on repayment sum taking into account the features determined by the budget legislation.

6. The obligation which does not answer recognition criteria is contingent obligation and the subject of public sector is not recognized, and is displayed on off-balance accounts in the amount of the expected repayment.

Items 7-15 are excluded according to the Order of the Ministry of Finance of Ukraine of 25.11.2014 No. 1163, with respect thereto Item 16 to consider Item 7

7. Contingent assets are not recognized and displayed by the subject of public sector on off-balance accounts. After control acquisition the asset ceases to be classified as conditional and is set off in assets with recognition on this income amount.

III. Disclosure of information on the obligation in notes to the financial reporting

1. The structure and the amount of obligations, terms and the reasons of their education are specified the beginning and the end of the accounting period.

Items 2-3 are excluded according to the Order of the Ministry of Finance of Ukraine of 25.11.2014 No. 1163, with respect thereto item 4 to consider Item 2

2. The structure and the amount of contingent assets and obligations are specified the beginning and the end of the accounting period.

Head of department of methodology of financial accounting

O. O. Kantsurov

 

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info

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