ORDER OF THE MINISTRY OF FINANCE OF THE KYRGYZ REPUBLIC

of October 1, 1997 No. 268/p

According to the Regulations on state registration of regulatory legal acts of the ministries, administrative departments of the Kyrgyz Republic approved by the order of the Government of the Kyrgyz Republic of July 21, 1997 N 424, and in pursuance of the State program of transition of the Kyrgyz Republic to the system of accounting and statistics accepted in the international practice according to requirements of development of market economy approved by the order of the Government of the Kyrgyz Republic of September 6, 1995 N 376 and of August 28, 1996 N 407 "About the course of realization by the ministries, administrative departments of actions of the State program of transition of the Kyrgyz Republic to the system of accounting and statistics accepted in the international practice", Agreements on cooperation between the Government of the Kyrgyz Republic and Agency of the United States on the international development of the Item B signed on April 11, 1997 and for the purpose of regulation of questions connected with need of transition of the republic to the national principles and accounting standards and the reporting, coordination of the events held for this purpose,

I ORDER:

1. Perform transition to national accounting standards and the reporting of all business entities (except banks and state-financed organizations) who are in the territory of the Kyrgyz Republic till 1999.

2. Approve 18 national accounting standards (The appendix N1 to this order).

3. Establish the term of entry into force of 18 national accounting standards and the reporting - on January 1, 1998.

4. Develop and approve the list of the companies and organizations passing to national accounting standards and the reporting until the end of 1997.

5. Determine that during transition period before creation of the Interdepartmental commission on financial accounting of the Kyrgyz Republic of its function are assigned to Management of methodology of financial accounting and reporting.

6. Repeal the order of the Ministry of Finance of the Kyrgyz Republic of July 22, 1997 N 242/item.

 

CONTENT

KSBU 1 - Accounting policy and its disclosure

KSBU 2 - Balance sheet

KSBU 3 - Report on results of financial and economic activities

KSBU 4 - Cash flow statement

KSBU 5 - Inventory stocks

KSBU 6 - Consequences of changes of the currency exchange rates

KSBU 7 - Income

KSBU 8 - Fixed asset accounting and other non-current assets

KSBU 9 - Accounting of tax on the income

KSBU 10 - Lease accounting

KSBU 11 - Consolidated financial statements and accounting of investments into affiliated enterprises

KSBU 12 - Accounting of government subsidies and other types of government assistance

KSBU 13 - Merging of the companies

KSBU 14 - Transactions between the related parties

KSBU 15 - Accounting of investments

KSBU 16 - Accounting of investments into associates

KSBU 17 - Accounting of share in joint businesses

KSBU 18 - Borrowing costs

 

Approved by the order of the Ministry of Finance of the Kyrgyz Republic of October 1, 1997, No. 268/p

KYRGYZ ACCOUNTING STANDARD 1

ACCOUNTING POLICY AND ITS DISCLOSURE

 
     I.   ЦЕЛЬ И СФЕРА ДЕЙСТВИЯ

     II.  ОПРЕДЕЛЕНИЯ

     III. ФОРМИРОВАНИЕ УЧЕТНОЙ ПОЛИТИКИ
     3.1. Факторы, влияющие на формирование учетной политики
     3.2. Формирование учетной политики
     3.3. Политика бухгалтерского учета

     IV.  РАСКРЫТИЕ УЧЕТНОЙ ПОЛИТИКИ
     4.1. Объекты раскрытия
     4.2. Условия раскрытия
     4.3. Требования к раскрытию

     V.   ДАТА ВСТУПЛЕНИЯ В СИЛУ 

I. Purpose and coverage

The Kyrgyz accounting standard 1 (KSBU 1) "Accounting policy and its disclosure" is developed on the basis of the International accounting standard 1 (MSBU 1) "Disclosure of policy of financial accounting".

The purpose of this Standard - establishment of bases of forming and disclosure (publicity giving) of accounting policy of the subject (the subject is understood further as the companies and the organizations, being by the legislation of the Kyrgyz Republic legal entities), choosing from set of the methods included in KSBU 1 "Accounting policy and its disclosure", those methods and procedures which are the most suitable for this subject.

Even various accounting policy can be applied to the same object of accounting, at the same time it is necessary to choose and apply that accounting policy which in the best way will be able to reflect financial position and results of transactions.

Action of this Standard extends:

a) regarding forming of accounting policy - on all subjects irrespective of patterns of ownership in all territory of the Kyrgyz Republic;

b) regarding disclosure of accounting policy - on the subjects publishing the financial reporting fully or partially according to the legislation of the Kyrgyz Republic, constituent documents or on own initiative.

II. Determinations

Accounting policy is set of the principles, bases, rules and the procedures adopted by the subject's management for financial accounting (primary observation, cost measurement, the current group, assessment and final generalization of the facts of economic activity).

Disclosure - representation in financial statements of all information important for complete and clear understanding users of results of activities of the subject.

III. Forming of accounting policy

Accounting policy is created by the subject's management on the basis of this Standard.

3.1. The factors influencing forming of accounting policy

When forming accounting policy it is necessary to consider the following factors:

a) legal and economic position of the subject, pattern of ownership, activities scales, availability of branches;

b) the current economic situation in the Kyrgyz Republic;

c) the legislation regulating economic activity, financial accounting, the taxation;

d) economic strategy of the subject.

Accounting policy is subject to registration by the relevant order or the order of management of the subject, the working chart of accounts of the company developed according to the Chart of accounts of financial accounting approved by the National commission on financial accounting of the Kyrgyz Republic, and before its creation - the Ministry of Finance of the Kyrgyz Republic shall be at the same time claimed.

The methods of financial accounting chosen subject when forming accounting policy are applied by all its structural divisions, including allocated for separate balance, irrespective of the place of their arrangement, since January 1 the year following after year of the publication of the relevant order or order and shall remain in force within accounting year.

Newly created subjects draw up the accounting policy elected by them according to this Item before the end of the first accounting period, but no later than 90 days from the date of acquisition of rights of the rights of the legal entity (state registration) by them.

The chosen accounting policy is considered applied from the date of registration of constituent documents.

3.2. Forming of accounting policy

Forming of accounting policy are the cornerstone fundamental accounting principles:

1) continuity

The company is considered as continuously acting that is as continuing to work in the near future. It is supposed that the company has neither intention, nor need for liquidation or considerable reducing scale of activities.

2) permanencies

It is supposed that the accepted methodology and the chosen accounting procedures did not change until there are notices on the made changes, at the same time nature and economic case of replacement shall be disclosed in the Explanatory note to financial statements. Reasons shall explain why the new accounting principle is given preference.

3) charges

Reflection in financial statements of consequences of the facts of economic activity (the income and expenses) when they took place, but not when money or their equivalents are received or paid.

If subjects in case of creation of financial statements adhere to the basic principles, then their disclosure (explanation in appendices to financial statements) it is not required.

If do not adhere to the basic principles, then this fact shall be discovered together with explanation of the reasons.

3.3. Policy of financial accounting

In case of the choice and application of the corresponding accounting policy and creation of financial statements the subject shall be guided by the following principles also:

1) discretion

Observance of sufficient precautionary measure in decision making process in the conditions of uncertainty of some events and circumstances (probability of collection of doubtful debts, possible term of useful functioning of buildings, the equipment, etc.). However discretion does not mean creation of the hidden reserves.

2) prevalence of essence over form

Economic activities are considered and represented according to their economic essence and financial reality which not always correspond to their legal form (transfer of asset to other party in such a way that documentary legal right of property is transferred, however, the subject continues to use future economic effect included in this asset).

3) materialities

Information is essential if its omission or the wrong assessment can influence the economic decisions made based on financial statements.

4) dualities

All economic events have two aspects: increase and reduction, expenditure and acquisition, origin and disappearance which compensate each other. Each fact of economic life shall be reflected twice in the identical amount - on the debit of one and the credit of other account (method of double record).

5) cost measurement

The fact of economic life measured in terms of money can only become object of financial accounting.

6) isolation

The companies are legally independent in relation to the () owners. Settlement accounts of the owner and the company of razdelna and responsibility according to obligations of each other it is not crossed.

7) estimates

The asset cost is considered at the time of their acquisition and remains at this level until they are not sold or consumed.

8) conservatism

Assessment of assets at the smallest cost from possible i.e. if market value of asset is higher than cost - in the report it is reflected at cost, and, on the contrary, if market value below cost - in the report market prices are put down. Thus, care of assessment both assets, and the estimated profit is provided.

9) classifications

Record of economic activities in system of accounts of financial accounting. The choice of accounts for reflection of economic activity exerts impact on financial results. For example, how acquisition of the tool as repair expenses or as purchase of the equipment, will affect profit size will be classified.

There are four main quality characteristics for information containing in financial statements:

1) clearness

The main quality of information given in financial statements - bystry understanding its users.

2) importance

Opportunity to affect result of the made decision. Information can influence decision making if it has forecast value, is based on feedback and is timely. Forecast informative value means its usefulness in case of creation of plans; feedback assumes that information contains something about that how true were previous assumptions; timeliness - receipt of information to the user in due time. If at the necessary moment there is no information, then having arrived further it does not matter for the subsequent actions any more and is not significant.

3) reliability

Information has quality of reliability in the absence of considerable mistakes and bias when it is easily checked and has neutral character. For the purpose of ensuring reliability information shall meet the following requirements:

a) completeness of representation - information shall reflect the facts of economic life most fully;

b) neutrality - information containing in financial statements shall be neutral, i.e. objective;

c) completeness - information in financial statements shall be complete taking into account materiality and costs when providing with information.

4) comparability

In order that users had opportunity to compare financial position, results and changes in financial position of the subject after time, in financial statements availability of the relevant information for the preceding accounting periods is necessary.

IV. Disclosure of accounting policy

Various accounting policy applied to the same object of financial accounting can result in much different results.

Disclosure, being integral part of the financial reporting, provides clearness and comparability of various financial statements.

4.1. Objects of disclosure

Objects of disclosure are methods (methods) of financial accounting significantly influencing assessment and decision making by users of the financial reporting.

These and potential investors, employees, creditors, suppliers and other trade creditors, and also clients, the government, government institutions and the public are among users of financial statements.

Methods of financial accounting without knowledge of which application by users of the financial reporting reliable assessment of property and financial condition, money turnover or results of activities of the subject, such as is impossible are recognized essential:

a) depreciation methods of fixed assets and intangible assets;

b) evaluation methods of production supplies, goods, work in progress and finished goods;

c) methods of recognition of the income from sales of products (goods, works, services);

d) methods of write-off of costs for financial results of the accounting period;

e) other methods and methods of financial accounting.

4.2. Disclosure conditions

Disclosure of accounting policy is obligatory in the presence of the following conditions:

a) changes in accounting policy because of reorganization of the subject (merge, separation, accession), changes of owners, changes of the legislation regarding normative regulation of financial accounting in the Kyrgyz Republic, developments of the new accounting methods having significant effect in current or the subsequent accounting periods. Disclosure is carried out with explanation of the reasons.

If influence of changes is essential, it shall be opened and estimated quantitatively.

Value term of consequences of changes in accounting policy is made based on the verified data for date with which the changed methods of financial accounting are applied;

b) if accounting policy of the subject is created proceeding from the principles provided in the Section III of this Standard, then they can not to reveal in the financial reporting;

c) if accounting policy of the subject is created proceeding from the principles, excellent from the provided by the Section III of this Standard, then such principles together with the reasons of their application and assessment of their consequences in value term shall be opened in the financial reporting;

d) in case of the publication of the incomplete financial reporting, information on accounting policy is subject to disclosure, at least, in the part relating to the published materials.

4.3. Requirements to disclosure

a) disclosure of the important principles of the used accounting policy shall be component of the financial reporting. As a rule, they find reflection in the explanatory note which is part of the financial reporting for the accounting period;

b) the financial reporting represented during the accounting period may contain not disclosures of accounting policy if in the last there were no changes from the moment of financial reporting preparation for the previous accounting period, revealed her.

V. The effective date

This Kyrgyz accounting standard becomes effective since January 1, 1998.

 

Approved by the order of the Ministry of Finance of the Kyrgyz Republic of October 1, 1997, No. 268/p

KYRGYZ ACCOUNTING STANDARD 2

BALANCE SHEET

 
      I.   ЦЕЛЬ И СФЕРА ДЕЙСТВИЯ

     II.  БУХГАЛТЕРСКИЙ БАЛАНС
     2.1. Общая часть
     2.2. Активы:
       а) текущие активы
       б) долгосрочные активы
     2.3. Обязательства
       а) текущие обязательства
       б) долгосрочные обязательства
     2.4. Собственный капитал:
       а) уставный капитал
       б) прочий капитал

     III. РАСКРЫТИЕ БУХГАЛТЕРСКОГО БАЛАНСА
     3.1. Общая часть
     3.2. Пояснительная записка к бухгалтерскому балансу

     IV.  ПРАВИЛА ОЦЕНКИ СТАТЕЙ БУХГАЛТЕРСКОГО БАЛАНСА

     V.   ДАТА ВСТУПЛЕНИЯ В СИЛУ

     ПРИЛОЖЕНИЕ
     1. Примерная форма бухгалтерского баланса
 

I. Purpose and coverage

The Kyrgyz accounting standard 2 (KSBU 2) "Balance sheet" is developed on the basis of the International accounting standard 5 (MSBU 5) "Information which is subject to disclosure in financial statements" and the International accounting standard 13 (MSBU 13) "Representation of the current assets and the current obligations".

The purpose of KSBU 2 "Balance sheet" is representation of form, content and methodical bases of the balance sheet, including certain requirements to information which is subject to disclosure in case of submission of financial statements and provision of information on terms of its publication.

The companies and the organizations, being by the legislation of the Kyrgyz Republic legal entities (further - subjects), shall observe provisions of this Standard.

The purpose of the financial reporting is providing users with useful, significant and reliable information for adoption of reasoned economic decisions. The legal entities or physical persons interested in information on the subject can be users of accounting records.

II. Balance sheet

2.1. General part

The balance sheet characterizes property and financial position of the subject as of reporting date. The balance sheet of the subject shall include indicators of activities of the branches, representations and other divisions including allocated for separate balances. Separate balance sheets are constituted according to this Standard.

Content and balance sheet forms and the explanatory note to it are applied consistently from one accounting period to another. In the balance sheet, except data for the first accounting period, data for the period, preceding reporting, with necessary adjustments shall be provided. Each adjustment shall be opened in the explanatory note. If necessary classification of Articles and cash items shall be supplemented with the other information explaining their sense.

The accounting period for creation of accounting records the period inclusive is considered from January 1 to December 31. The first accounting year for the newly created subject begins from the moment of its state registration to December 31 of accounting year, and for the subjects created after October 1, the period from the date of state registration till December 31 of the next year first accounting year is considered. For creation of accounting records the last calendar day of the accounting period is considered reporting date.

The balance sheet is signed by the head and the chief accountant (accountant) of the subject. If financial accounting is kept on a contract basis by the specialized organization (centralized accounts department) or the specialist, the balance sheet is signed by the subject's head, the head of the specialized organization (centralized accounts department), or the specialist keeping financial accounting.

2.2. Assets

Assets are the resources controlled by the subject as result of last events which use will possibly bring in the future to inflow of economic benefit. On expected liquidity (ease with which the asset can be turned into money), assets share on current and long-term.

a) Current assets

The current assets are assets which during the period up to one year shall address in money again.

1) the Money and their equivalents include cash liquidity in cash desk and means on the current and other accounts in banks. Under this Article also money which cannot be used immediately (for example, the remaining balance of means refrigerated in foreign banks because of exchange restrictions) are reflected if limits are lifted within year.

2) Short-term investments - deposits to the securities which are traded on the market intended for ownership no more than for one year term deposits, deposit certificates, treasurer bills of exchange, bonds of the state or other loans representing current assets which can be used for repayment of the current obligations. Market value of short-term investments shall be disclosed in the explanatory note if it differs from book value.

3) Accounts to obtaining - the accounts receivable which, as expected, will be paid within one year from reporting date include:

a) accounts and bills of exchange to obtaining from sales of goods or services on credit corrected on the amount of doubtful or bad debts;

b) accounts receivable of workers and officials;

c) the inter-company accounts receivable which arose in case of transactions between head enterprise and its subsidiary companies or subsidiary company and other subsidiary companies in this group;

d) accounts receivable of associates, i.e. companies in which the investor has considerable influence, but which are not either affiliated enterprises, or joint businesses of the investor (subject);

e) other accounts receivable.

4) Debt of participants (founders) on fees in the authorized capital - debt of founders on deposits to the authorized capital when carrying out constituent issue and debt of faces which were signed for shares on all subsequent issues.

5) Inventory stocks, irrespective of the term of their conversion and realization:

a) raw materials, materials, fuel, purchased semifinished products and components, designs and details, container and tare materials, spare parts, construction materials, materials transferred to conversion on the party;

b) costs in work in progress (distribution costs);

c) finished goods and goods for resale.

6) the Expenses paid in the advance payment - the services paid in the advance payment, advance payment of rent payments and other advanced payments.

7) Delayed expenses - short-term delayed costs, taxes, etc.

8) Other current assets - the current assets which did not enter above-mentioned Articles.

b) Non-current assets

Non-current assets - assets which are available for the subject for use in production of leasing, the administrative purposes and are assumed to use for more than one year.

1) Fixed assets:

a) earth;

b) buildings and constructions;

c) equipment;

d) furniture and accessories;

e) vehicles;

e) systematically classified other types of fixed assets;

g) the added depreciation.

In the explanatory note dolgosrochno the leased fixed assets and fixed assets bought by installments separately shall be opened.

2) Long-term accounts receivable - the debt, repayment period more than one year, includes:

a) accounts and bills of exchange to obtaining from sales of goods or services on credit corrected on the amount of doubtful or bad debts;

b) accounts receivable of workers and officials;

c) inter-company accounts receivable;

d) accounts receivable of associates;

e) other accounts receivable.

3) Long-term investments - financial investments in the securities intended for ownership more, than for one year, including:

a) investments into subsidiary companies;

b) investments into associated companies;

c) other investments.

Long-term investments are considered in balance on acquisition value, market value of investments shall be disclosed in the explanatory note if it differs from book value.

4) Intangible assets are the non-current assets which do not have physical shape, but having the cost based on the rights or privileges of the owner. These assets are considered at the acquisition price which during the expected period of use will be amortized. Intangible assets can include the following:

a) patents - exclusive rights on production of certain type of products or use of unique technology;

b) copyright (the right to replication) - exclusive rights on the edition and realization of literary, musical, film, video and other materials, including the computer software;

c) trademarks - the registered symbol or the name with its right to use for identification of the made goods or services;

d) the franchize, the license, formula, process - the right to exclusive use of certain formula, technology or appearance;

e) goodwill (the price of firm) - excess of acquisition value of the company in general over market value of all assets of the company bought separately.

5) the Charged depreciation on intangible assets - the assets having certain service life (patents, the rights) shall be written off by depreciation during the term of their service on the assets which do not have service life limit (trademarks, goodwill), depreciation is charged during reasonable time, but no more than 40 years.

2.3. Obligations

Obligations arise from last events, calculation for which shall come to the end with outflow of the resources of the subject personifying economic benefits. Are classified by repayment periods of the obligation on the current (short-term) and long-term obligations.

a) Current obligations

The current obligations are the obligations which are subject to payment upon the demand of the creditor and part of long-term obligations which repayment is expected within one year from reporting date. The current obligations can include the following:

1) Accounts for payment - accounts and bills of exchange on trading activities for payment.

2) Short-term debt obligations - short-term bank loans, the current share of long-term obligations and other short-term obligations.

3) Taxes for payment - the income tax, the value added tax, excises and other taxes for payment.

4) the Added obligations the expenses - added, but not paid yet, such as debt to personnel on payment of leaves and remunerations, percent on finance lease and other obligations, fees on the social insurance, pensions added irrespective of the state system of provision of pensions, accrued expenses on fee, other accrued expenses.

5) the Current obligations - obligations to personnel on compensation, dividends for payment, obligations on payment of the fees, fees on social insurance, commission charges, expenses on guarantee maintenance to payment and other short-term obligations, including the deferred revenues relating to future accounting periods is not higher than one year.

b) Long-term obligations

Long-term obligations - debt which is not planned to repayment within one year from reporting date.

1) Long-term obligations are long-term loans of banks and non-bank organizations, bonds to repayment, the payment bill, the obligation on the financed lease.

Separately in the explanatory note the following Articles shall reveal:

- secure loans;

- unsecured loans;

- inter-company loans;

- the loans obtained from associated companies;

- interest rates and loan repayment periods;

- contractual commitments, priority of payments, features of transformation of debt obligations to shares of this subject;

- the amounts of unamortized discount or the allowance on bonds.

2) Long-term delayed accounts for payment and other long-term obligations - delayed taxes for payment, the deferred revenues gained for the period over one year (the rent on long-term lease) and other long-term obligations.

2.4. Equity

The equity is assets of the subject less its obligations. The capital in balance is provided by two Sections - the authorized capital and the other capital.

a) Authorized capital

The authorized capital is reflected in the balance sheet in the amount of deposits of the founders provided by constituent documents or in the amount of the issue registered by state bodies. According to the requirement of provision to users of information on types of shares the authorized capital has the following Articles:

1) Common shares - shares which rights to equity interest are satisfied after preferred shares, but the granting voting power and possibility of control of activities of the subject.

2) Preferred shares - the shares having advantages before common shares in case of receipt of dividends, distribution of means of the liquidated subject, but not granting voting powers.

3) the Redeemed own shares (withdrawal of the capital) - common or preferred shares which were sold then are redeemed by the issuer, but not issued repeatedly and not cancelled. The redemption the issuer of own shares leads to reduction of assets and share capital, and the cost of the redeemed own shares is reflected in balance as subtracted from general result according to the Section "Authorized capital".

By each type of shares in balance or the explanatory note the following data shall be opened:

1) the number of the shares (the announced, subscribed and paid-in capital) announced, issued and being in circulation;

2) unpaid capital;

3) nominal value of each share;

4) quantity, share value, the dividends issued on account of reinvestment;

5) movement on accounts of share capital during the period;

6) deposited share dividends;

7) the shares intended in the future for issue under options and to trade contracts with indication of terms of release and the amounts.

b) The other capital includes:

1) the Supplementary paid-in capital - in addition paid part of share capital over nominal of preferred and common shares.

2) Retained earnings (accumulated capital) - difference between the got profit and the paid dividends.

3) the Reserve capital - the reserves formed according to the legislation of the Kyrgyz Republic or according to constituent documents.

4) the Added capital - the revaluation amounts arising in case of revaluation of fixed assets and net unrealized increase (lowering) in cost of investments as result of their reduction to fair (market) value.

III. Disclosure of the balance sheet

3.1. General part

In the balance sheet availability of the following details is necessary: the name of the subject, place of registration and stays, the accounting period or reporting date, date of creation, and also the short description of nature of activities of the subject, its legal position and currency in which economic activity of the subject is estimated. The disclosure of the balance sheet necessary to make it clear and clear for users, is performed in the explanatory note to financial statements and its procedure is established by KSBU 1 "Accounting policy and its disclosure".

3.2. Explanatory notes to financial statements

The explanatory note shall contain the following data opening balance sheet items:

a) availability for the beginning and the end of the accounting period of separate types of accounts receivable;

b) availability for the beginning and the end of the accounting period and movement during the accounting period of separate types of investments;

c) availability for the beginning and the end of the accounting period and movement during the accounting period of separate types of fixed assets, intangible assets and leased fixed assets;

d) restrictions in right of possession assets;

e) guarantees issued under obligations;

e) contingent assets and obligations;

g) the means intended for financing of future capital investments;

h) availability for the beginning and the end of the accounting period of separate obligation types;

i) capital structure depending on pattern of ownership:

1) in case of the state or private form - the capital of the owner is reflected one amount;

2) in case of collective form - the size of the capital can be painted on his investors;

3) in case of stock ownership - by types of shares;

j) equity changes (joint-stock, reserve, additional);

k) the number of the shares issued and paid, issued, but not paid or paid partially;

l) structure of reserves, availability them for the beginning and the end of the accounting period, cash flow of each reserve during the accounting period;

m) structure of retained earnings - retained earnings of last years, the accounting period, deductible losses of last years, the accounting period.

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