RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of July 1, 2011 No. 68

About approval of the Instruction for financial accounting by certain subjects of the financial market

According to the subitem 63) of part two of article 15 of the Law of the Republic of Kazakhstan "About National Bank of the Republic of Kazakhstan", subitems 1) and 3-4) Items 6 of article 20 of the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Instruction for financial accounting by certain subjects of the financial market.

2. This Instruction disaggregates financial accounting of transactions on placement of own money in deposits, loans, securities, derivative tools, the affined precious metals, foreign currency, hedging transactions, and also repo operations and the return repo by the single accumulation pension fund, the Voluntary accumulation pension funds (further – the accumulation pension funds), the organizations performing separate types of banking activities, the insurance (reinsurance) organizations, the Islamic insurance (reinsurance) organizations, societies of mutual insurance, insurance brokers, professional participants of the security market, special finance companies, joint-stock investment funds and the microfinancial organizations (further – the organization).

Action of Chapters 4, of 7, of 9, of the 10 and 11 this Instruction does not extend to the Islamic insurance (reinsurance) organizations.

3. From the date of enforcement of this resolution to recognize invalid the resolution of Board of National Bank of the Republic of Kazakhstan of November 28, 2008 No. 98 "About approval of the Instruction for financial accounting by certain subjects of the financial market of the Republic of Kazakhstan" (registered in the Register of state registration of regulatory legal acts at No. 5433).

Approved by the Resolution of Board of National Bank of the Republic of Kazakhstan of July 1, 2011 No. 68

Instruction for financial accounting by certain subjects of the financial market

Chapter 1. General provisions

1. This Instruction is developed according to the subitem 63) of part two of article 15 of the Law of the Republic of Kazakhstan "About National Bank of the Republic of Kazakhstan", subitems 1) and 3-4) Items 6 of article 20 of the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting" and international accounting standards.

2. This Instruction disaggregates financial accounting of transactions on placement of own money in deposits, loans, securities, derivative financial instruments, the affined precious metals, foreign currency, hedging transactions, and also repo operations and the return repo by the single accumulation pension fund, the Voluntary accumulation pension funds (further – the accumulation pension funds), the organizations performing separate types of banking activities (except for the mortgage organizations and legal entities which were earlier subsidiary banks), professional participants of the security market, the organizations performing microfinancial activities, insurance brokers and branches of insurance brokers - nonresidents of the Republic of Kazakhstan, the organization guaranteeing implementation of insurance payments to insurers (insured, to beneficiaries) in case of liquidation of insurance companies (further – the organization).

3. In this Instruction accounting methods of transactions of purchase and sale of financial assets for date of the conclusion of the transaction and for date of payment under the transaction according to international accounting standards are applied. The choice of one of the accounting methods of transactions of purchase and sale of financial assets specified in this Item is determined by accounting policy of the organization.

4. Making of the additional accounting entries which are not contradicting this Instruction and the legislation of the Republic of Kazakhstan on financial accounting and the financial reporting is allowed.

Chapter 2. The basic concepts used in this Instruction

5. In this Instruction the following concepts are used:

1) debt securities - the securities certifying the right of its owner to obtaining from the issuer of the amount of principal debt in the amount of and in the terms established by release conditions;

2) discount (discount) - the amount of negative difference arising between acquisition value of the debt security (without the added remuneration) and its nominal value, forming deferred revenues for the investor (buyer);

3) book value - the cost at which asset or liability are reflected in the balance sheet less remuneration;

4) No. 171 is excluded according to the Resolution of Board of National Bank of the Republic of Kazakhstan of 14.10.2019;

5) costs according to the transaction are the additional expenses which are directly connected with acquisition, release or disposal of financial asset or the financial liability which are the compulsory provision for their acquisition, release or realization;

6) award - the amount of positive difference arising between acquisition value of the debt security (without the added remuneration), and its nominal value, forming deferred expenses for the investor (buyer);

7) depreciation of award or discount (discount) is gradual reference of the amount of registered award or discount (discount) for the income or expenses of the organization;

8) equity securities - the securities certifying the right to share in net assets (assets less obligations) the organizations. For the purpose of this Instruction shares, depositary receipts on the shares, shares of mutual investment funds and other securities falling under determination of equity securities according to international accounting standards belong to equity securities.

Chapter 3. Financial accounting of transactions with securities

Paragraph 1. Accounting of the acquired debt securities carried at fair value which changes are reflected in profit or loss, and carried at fair value through other comprehensive income

6. Upon purchase of the debt securities classified in category "the securities estimated at fair value which changes are reflected in profit or loss" and "securities carried at fair value through other comprehensive income" (on the purchase value including costs according to the transaction) the following accounting entries are performed:

1) in case of advance transfer to the broker:

Dt	1610 02	Settlings with brokers
Kt	1030	Money on current accounts;

2) on the net value of the acquired debt security (on the amount which is not exceeding it nominal value) taking into account costs according to the transaction:

Dt	1120 01	The financial assets carried at fair value which changes are reflected in profit or loss
	1140 01	The current financial assets carried at fair value through other comprehensive income
	2030 01	The non-current financial assets carried at fair value through other comprehensive income
Kt	1030	Money on current accounts
	1610 02	Settlings with brokers;

3) on the award amount including the costs connected with acquisition of the debt security:

Dt	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 03	Award on the acquired financial assets carried at fair value through other comprehensive income
	2030 03	Award on the acquired non-current financial assets carried at fair value through other comprehensive income
Kt	1030	Money on current accounts;

4) on the amount of discount (discount):

Dt	1120 01	The financial assets carried at fair value which changes are reflected in profit or loss
	1140 01	The current financial assets carried at fair value through other comprehensive income
	2030 01	The non-current financial assets carried at fair value through other comprehensive income
Kt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 02	Discount on the acquired financial assets carried at fair value through other comprehensive income
	2030 02	Discount on the acquired non-current financial assets carried at fair value through other comprehensive income;

5) on the amount of remuneration, added by the previous holder:

Dt	2170 03	The remuneration added by the previous holders on securities
	1270 04	The remuneration added by the previous holders on securities
Kt	1030	Money on current accounts;

6) in case of excess of the amount of transaction on purchase of debt securities over their fair value:

Dt	7470 10	Expenses from purchase - security sale
Kt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 02	Discount on the acquired financial assets carried at fair value through other comprehensive income
	1140 03	Award on the acquired financial assets carried at fair value through other comprehensive income
	2030 02	Discount on the acquired non-current financial assets carried at fair value through other comprehensive income
	2030 03	Award on the acquired non-current financial assets carried at fair value through other comprehensive income;

7) in case of excess of fair value of debt securities over the amount of transaction on their purchase:

Dt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 02	Discount on the acquired financial assets carried at fair value through other comprehensive income
	1140 03	Award on the acquired financial assets carried at fair value through other comprehensive income
	2030 02	Discount on the acquired non-current financial assets carried at fair value through other comprehensive income
	2030 03	Award on the acquired non-current financial assets carried at fair value through other comprehensive income
Kt	6280 09	Income from purchase - security sale.

7. When charging remuneration according to the acquired debt securities carried at fair value which changes are reflected in profit or loss and carried at fair value through other comprehensive income, with the frequency established by accounting policy of the organization on the amount of the added remuneration the following accounting entry is performed:

Dt	1270 01	Imputed incomes in the form of remuneration on the acquired securities
	2170 01	Imputed incomes in the form of remuneration on the acquired securities
Kt	6110 01	The income connected with receipt of remuneration on the acquired securities.

8. When charging expenses in the form of the corporate income tax which is subject to deduction at source of payment by the issuer of the debt security the following accounting entry is performed:

Dt	7710	Expenses on the corporate income tax
Kt	3110 01	The corporate income tax which is subject to payment.

 

9. In case of depreciation of premium or discount (discount) to the acquired debt securities carried at fair value which changes are reflected in profit or loss and carried at fair value through other comprehensive income, with the frequency established by accounting policy of the organization the following accounting entries are performed:

1) on award depreciation amount:

Dt	7310 02	The expenses connected with depreciation of premium to the acquired securities
Kt	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 03	Award on the acquired financial assets carried at fair value through other comprehensive income
	2030 03	Award on the acquired non-current financial assets carried at fair value through other comprehensive income;

2) on depreciation amount of discount (discount):

Dt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1140 02	Discount on the acquired financial assets carried at fair value through other comprehensive income
	2030 02	Discount on the acquired non-current financial assets carried at fair value through other comprehensive income
Kt	6110 03	The income connected with depreciation of discount on the acquired securities.

10. After charge of remuneration and depreciation of award or discount (discount) according to Items 7 and 9 of this Instruction, revaluation of the acquired debt securities estimated at fair value which changes are reflected in profit or loss, and carried at fair value through other comprehensive income is made, at fair value, with the frequency established by accounting policy of the organization and the following accounting entries are performed:

1) according to the debt securities carried at fair value which changes are reflected in profit or loss:

if fair value of debt securities is higher than their book value:

Dt	1120 04	Positive fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss
Kt	6150 01	Income from change in value of the securities carried at fair value which changes are reflected in profit or loss;

if the book value of debt securities is higher than their fair value:

Dt	7470 03	Expenses from change in value of the securities carried at fair value which changes are reflected in profit or loss
Kt	1120 05	Negative fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss;

on the amount of the registered positive or negative fair value adjustment of debt securities:

Dt	1120 05	Negative fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss
Kt	1120 04	Positive fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss.

2) according to the debt securities carried at fair value through other comprehensive income:

if fair value of debt securities is higher than their book value:

Dt	1140 04	Positive fair value adjustment of the financial assets carried at fair value through other comprehensive income
	2030 04	Positive fair value adjustment of the non-current financial assets carried at fair value through other comprehensive income
Kt	5440	Reserve on revaluation of the financial assets carried at fair value through other comprehensive income;

 

if the book value of debt securities is higher than their fair value:

Dt	5440	Reserve on revaluation of the financial assets carried at fair value through other comprehensive income
Kt	1140 05	Negative fair value adjustment of the financial assets carried at fair value through other comprehensive income
	2030 05	Negative fair value adjustment of the non-current financial assets carried at fair value through other comprehensive income;

 

on the amount of the registered positive or negative fair value adjustment of debt securities:

Dt	1140 05	Negative fair value adjustment of the financial assets carried at fair value through other comprehensive income
	2030 05	Negative fair value adjustment of the non-current financial assets carried at fair value through other comprehensive income
Kt	1140 04	Positive fair value adjustment of the financial assets carried at fair value through other comprehensive income
	2030 04	Positive fair value adjustment of the non-current financial assets carried at fair value through other comprehensive income.

 

11. In case of revaluation of the debt securities carried at fair value which changes are reflected in profit or loss and carried at fair value through other comprehensive income which cost is expressed in foreign currency, on the exchange rate of currencies the following accounting entries are performed:

1) according to the debt securities carried at fair value which changes are reflected in profit or loss:

in case of increase in the exchange rate of currencies at the amount of positive exchange difference:

Dt	1120 01	The financial assets carried at fair value which changes are reflected in profit or loss
	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 04	Positive fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss
	1270 01	Imputed incomes in the form of remuneration on the acquired securities
	1270 04	The remuneration added by the previous holders on securities
Kt	6250 02	Income from revaluation of foreign currency;

at the same time, on the amount of negative exchange difference:

Dt	7430 02	Expenses from revaluation of foreign currency
Kt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 05	Negative fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss;

in case of reduction of the exchange rate of currencies by the amount of negative exchange difference:

Dt	7430 02	Expenses from revaluation of foreign currency
Kt	1120 01	The financial assets carried at fair value which changes are reflected in profit or loss
	1120 03	Award on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 04	Positive fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss
	1270 01	Imputed incomes in the form of remuneration on the acquired securities
	1270 04	The remuneration added by the previous holders on securities;

at the same time, on the amount of positive exchange difference:

Dt	1120 02	Discount on the acquired financial assets carried at fair value which changes are reflected in profit or loss
	1120 05	Negative fair value adjustment of the financial assets carried at fair value which changes are reflected in profit or loss
Kt	6250 02	Income from revaluation of foreign currency;

2) according to the debt securities carried at fair value through other comprehensive income:

in case of increase in the exchange rate of currencies at the amount of positive exchange difference:

Dt	1140 01	The current financial assets carried at fair value through other comprehensive income
	1140 03	Award on the acquired financial assets carried at fair value through other comprehensive income
	1270 01	Imputed incomes in the form of remuneration on the acquired securities
	1270 04	The remuneration added by the previous holders on securities
	2030 01	The non-current financial assets carried at fair value through other comprehensive income
	2030 03	Award on the acquired non-current financial assets carried at fair value through other comprehensive income
	2170 01	Imputed incomes in the form of remuneration on the acquired securities
	2170 03	The remuneration added by the previous holders on securities
Kt	6250 02	Income from revaluation of foreign currency;

at the same time, on the amount of negative exchange difference:

Dt	7430 02	Expenses from revaluation of foreign currency
Kt	1140 02	Discount on the acquired financial assets carried at fair value through other comprehensive income
	2030 02	Discount on the acquired non-current financial assets carried at fair value through other comprehensive income;

on the amount of positive fair value adjustment of debt securities:

Dt

1140 04

Positive fair value adjustment of the financial assets carried at fair value through other comprehensive income

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