International Financial Reporting Standards

Running head: FINANCIAL STANDARDS
International Financial Reporting Standards
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International Financial Reporting Standards
The Russian government in 1998 argued that International Financial Reporting Standards (IFRSs) are key to accounting reforms. A PWC publication on an IFRS convergence shows that IFRSs are not permitted in preparation of consolidated accounts. PWC 2099 publication notes that the legal framework for Russian Generally Accepted Accounting Principles (GAAP) is governed by the federal law on accounting a civil code. Accounting practices of companies in Russia are regulated by state authorities. The ministry of Finance of Russian Federation (MoF), the Central Bank of the Russian Federation (CBR), and the Federal Financial markets Service (FFMS), and the Federal Tax Service are the bodies responsible for setting accounting rules and enforcing their implementations (Estandards Forum, 2010).
Whereas CBR determines reporting requirements for banks and credit institutions, MoF sets standards for the rest of the companies. The term accounting is well understood in Russia in comparison to the other countries. The 2006 IPAR (Institute of Professional Accountants and Auditors of Russia) report indicates that FFMS, which supervises the financial markets does not set accounting standards for companies under its jurisdiction however it is responsible for enforcing compliance with the financial reporting requirements (Estandards Forum, 2010).
In 1998, the Russian Government adopted a program for accounting reforms designating the IFRS’s as the main instrument of the forum. It was agreed that in the period 2004-2007 public interest enterprises were required to use IFRSs in their consolidated accounts. From 2008-2010 all public interest enterprises were to switch to IFRSs in their consolidated statements. Thus the 1998 concept adopted two main directions of accounting in Russia: Gradual Introduction of IFRSs for consolidated accounts for different types of companies and elimination differences between PBUs and IFRSs (Estandards Forum, 2010). Its implementation however required introduction of significant changes to the laws and regulations governing financial reporting in Russia.
Howard Gethins article on “Russia’s ro...