Legislative Review

June 22 – 26, 2020. Government has clarified which quarantine restriction apply until July 31, 2020

The Cabinet of Ministers of Ukraine has clarified which quarantine restrictions are valid until July 31, 2020.

Quarantine rules on the territory of Ukraine consist of the following main prohibitions:

  • being without respirators or protective masks covering the nose and mouth (including self-made), in public transport, public buildings and structures;
  • being on the streets without identity documents;
  • visits of educational institutions by its applicants in groups of more than 10 people, except for participation in external independent evaluation and other urgent educational activities;
  • passenger traffic in quantities greater than the number of seats in the vehicle;
  • holding mass (cultural, entertainment, sports, social, religious, advertising and other) events with the participation of more than one person per 5 square meters of the building or area where it is held. The distance between the participants must be at least 1.5 m;
  • operation of children's health and recreation facilities;
  • visiting social protection institutions and establishments where elderly people, persons with disabilities live/stay, etc.; institutions and establishments that provide social services to families/individuals in difficult life circumstances, except for establishments and entities that provide social services in an emergency (crisis);
  • crossing the state border by foreigners and stateless persons without an existing insurance policy for expenses related to COVID-19 treatment, observation;
  • health care facilities to carry out planned hospitalization measures, except for: planned hospitalization in regions where the occupancy of beds in health care facilities designated for hospitalization of patients with a confirmed case of COVID-19 is less than 50%. Patients receiving medical care in connection with planned hospitalizations are subject to mandatory testing for COVID-19.

The Ministry of Finance of Ukraine has published on its official website updated international accounting standards in the section “International Financial Reporting Standards”:

  • IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
  • IAS 23 Borrowing Costs;
  • IAS 40 Investment Property;
  • IFRIC 16 Hedges of Net Investment in a Foreign Operation.

The Ministry of Finance has updated the official translation of these documents and now they take into account a number of existing improvements. The companies that prepare financial statements in accordance with International Financial Reporting Standards (hereinafter – IFRS) should carefully study the updated standards. After all, according to Art. 121 of the Law on Accounting in Ukraine for the preparation of financial statements in accordance with IFRS the international standards, which are set out in the state language and officially published on the website of the Ministry of Finance are applied.

The following points should be noted.

First, the term “significant” in the context of IAS 8 is to be understood as defined in item 7 of IAS 1 “Presentation of Financial Statements”.

Item 6 of IAS 8, which referred to the Conceptual Framework for the Preparation and Presentation of Financial Statements and assumed that users have relevant knowledge of business, economic activity and accounting and seek to study information with sufficient care, has also been removed. However, a similar provision is stated in item 7 of IAS 1. However, due to this year's update of the Conceptual Framework for Financial Reporting, it has lost its relevance.

Second, item14 of IAS 23 has added a provision that when determining the capitalization rate (the weighted average cost of borrowings for all borrowings of an entity that is outstanding during the period), the entity shall exclude from the calculation of borrowing costs, carried out specifically for the purpose of obtaining a qualifying asset until, to a significant extent, all measures necessary to prepare that asset for its intended use or sale are completed. The entity must apply those amendments to borrowing costs incurred at the beginning or after the beginning of the annual reporting period in which the entity first applies those amendments (items 28A, 29D of IAS 23).

The name of assets from qualified to qualifying and a number of other translation problems in Ukrainian have also been corrected.

Third, the revised IAS 40 expands, inter alia, item 53 on situations where it is not possible to measure the fair value of investment property reliably.

Fourth, IFRIC 16 has corrected the reference from IAS 39 to IFRS 9.

These are just a few changes. Accountants of IFRS reporting companies should carefully analyze the updated documents.

The State Judicial Administration of Ukraine has reported that today there is a critical situation with the provision of justice due to the lack of adequate financial support of courts with current expenses for the administration of justice in 2020.

Budget allocations for these purposes at the beginning of this year are provided in the amount of only UAH 444.7 million, while cash expenditures in 2019 amounted to UAH 1, 159.9 million.

Given the increase in this amount of expenditures last year on the growth rate of court cases and the consumer price inflation index, the minimum need for current expenditures on litigation in 2020 will be UAH 1,276.3 million.

Accordingly, the deficit to ensure the administration of justice at the beginning of 2020 amounted to UAH 831.6 million.

In fact, to date, the courts have already used all their financial resources provided by the Law “On the State Budget of Ukraine for 2020” to purchase envelopes, stamps, video and audio discs, paper, consumables for office equipment, to pay for appropriate services to send mail correspondence (marking machines, video conferencing during the court hearing, Internet, telephony).

In connection with this, the courts are forced to suspend the sending of postal correspondence, which notifies the parties to court hearings (court summons, copies of procedural documents, etc.).

At the suggestion of the State Judicial Administration of Ukraine as a body that, in accordance with the Law “On the Judiciary and the Status of Judges” provides, in particular, financial support for courts, other bodies and institutions of the judiciary, the Ministry of Finance amended the annual budget allocations for 2020 within the budget allocations provided for under КПКВК 0501020 “Ensuring the administration of justice by local, appellate courts and the functioning of bodies and institutions of the justice system” in terms of redistribution of appropriations totaling UAH 200 million.

This will make it possible to partially solve the problem of the courts sending postal correspondence, through which the parties in the cases are notified of court hearings, the payment of fees to jurors, and so on.

The State Labor Service of Ukraine has informed whether it is mandatory to keep a timesheet.

The timesheet is a document of primary accounting, which is necessary to record the use of working time of employees, as well as to monitor compliance with the established mode of work, payroll with employees, obtain information about hours worked, statistical reporting.

An important value of correct and accurate accounting of working time is to determine the length of service of employees, accrual of sick leave. The normative document concerning the timesheet is order of the State Statistics Committee of Ukraine No. 489 dated December 5, 2008 which approved and put into effect from January 1, 2009 standard form No. П-5 “Timesheet” (hereinafter – Timesheet).

Form No. П-5 has non-regulatory, so, if necessary, it can be supplemented by other indicators required for the accounting of working time in the enterprise, but the Table should reflect all the items used in the entity for employees. If necessary, another form of the Table can be used, but it is mandatory to have a primary record of indicators on the use of working time, attendance and absences of employees, which are determined by the forms of state statistical surveys on labor.

According to letter of the Ministry of Labor No. 140/13/116-10 of May 13, 2010 keeping the Table is mandatory for both large and small enterprises.

The timesheet is a list of all employees of an enterprise or organization with notes on the use of working time during the accounting period, including those hired temporarily or for seasonal work, as well as students hired for the period of internship with remuneration. The report is kept in electronic and paper form. Individuals working on the basis of civil law contracts are not registered. Each employee is given a tabel number.

The Table is opened on the first day of each month and is submitted to the accounting department twice a month for calculations for the first half of the month (advance) and calculation of salary for the month.

If the number of employees is small, the Table is kept by accountants.

At large enterprises, the Tabel is staffed by human resources or even a position such as a payroll is introduced (when there are many shops, structural subdivisions, different working hours, etc.). Also, these functions may be entrusted to department heads.

At the end of the month according to the Table the total number of overtime and night hours, weekends and holidays are counted. The total number of days and hours of absence from work are determined.

During the introduction of summary accounting of working hours, work schedules are developed, according to which the duration of work during the week may not exceed the norm established by law (40 hours per week). The duration of work during the established accounting period should correspond to the duration of work for the same period for employees with a five-day working week. Therefore, keeping a timesheet is mandatory for everyone. Failure to keep the Table is a violation of labor legislation of Ukraine, in particular the rules of Part 2 of Art. 10 of the Law of Ukraine “On Remuneration of Labor”.

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