Recently, the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Changes to the Law of Ukraine “On Financial Accounting and Reporting in Ukraine” (on improvement of certain provisions). The law will come into force on January 1, 2018, if signed by the President of Ukraine and publicized.
“De Visu” Group experts paid attention to this event and conducted a seminar, during which they discussed the main innovations of the law.
One of them is that the list of companies, which have to prepare financial statements according to the International Financial Reporting Standards (hereinafter - IFRS) has expanded. Large companies joined the public joint stock companies, banks and insurance companies; other financial institutions that are larger than “small companies”; issuers of securities admitted to trade at stock exchange (other than public joint-stock companies, banks and insurance companies); companies that are involved in extraction of subsoil resources of state significance (gas, oil, major ores, coal etc.).
In addition, now there is a requirement to maintain accounting in accordance with IFRS accounting policies for companies that are required to prepare financial and consolidated financial reporting under IFRS.
During the seminar, the experts noted that for the preparation of financial statements under IFRS, the Ministry of Finance of Ukraine should approve the taxonomy of financial reporting (list of items and key figures of financial statements and its elements that companies should disclose) and the unified electronic format for online filing of such financial statements.
According to “De Visu” Group representatives, an important innovation of the law is the expansion of the list of companies that are required to publish annual financial and annual consolidated financial statements together with the report of the independent auditor. Thus, large companies that are not issuers of securities, and medium-sized companies should publish on their own web-site the mentioned reporting, together with auditorꞌs reports, in addition to public joint- stock companies, issuers of securities and financial institutions, - by June 1 following the reporting year. It should be also done by natural monopoly enterprises on a state-wide market and enterprises that are involved in extraction of subsoil resources of state significance – by April 30 following the reporting year.
The experts noted that the new law introduced requirements for the preparation and publication of management report and a report on payments to the government.
During the event, the experts noted that, in accordance with the innovations introduced, companies, in addition to the obligatory financial statements for the calendar year and the quarterly financial statements, may now prepare financial statements for other reporting periods, and, if required by users of the financial statements, may translate the financial statements into a foreign currency.
The seminar participants discussed other amendments that apply to accounting and financial reporting.
“Due to the new law, we will be able to bring the accounting closer to European standards, thereby increasing the level of transparency and comparability of financial reporting figures of Ukrainian companies. This will enable the domestic business to work in a new way, and will also help to revitalize the process of attracting foreign investment to our country” – Oleksandr Boiko, “De Visu” Group President, said.
