Home  Journals  Finance and Credit  44(620) - 2014 November

Statutory regulation of accounting for financial results under Russian and international standards

Available online: 23 November 2014

Subject Heading: FINANCIAL STATEMENTS

JEL Classification: 

Pages: 54-60

The article states that in modern economic environment the main function of profit is reflecting the efficiency of commercial company operations. Profit represents the final financial result characterizing financial and economic activity of entire organization, i.e. forms the basis of economic development of an organization. Therefore, improving the mechanism of generating correct accounting for financial results of company activity is an important aspect of the financial accounting science. From the perspective of economic problems that Russia faces at present, and the course to the national and international standards' convergence, the purposes of improving statutory regulation should be economic stabilization, incentives to develop higher priority areas of activity and structural shifts, and increased transparency and quality of financial statements. This is an essential condition of developing both the financial market and the real sector of economy. The author has considered the main statutes and regulations prescribing accounting treatment of profit generation of a commercial organization in the Russian Federation, presented a system of classification criteria and types of financial results of a commercial organization, analyzed the definitions of the "income" and "expense" concepts existing in the Russian and international accounting systems. The author has also grouped the criteria of revenue recognition under Accounting Regulation "Revenues of the Organization" (RAS 9/99) and IFRS 18 "Revenue". In general, Income Statement includes the information on financial results of an organization. Based on comparison of requirements of IFRS 1 "Presentation of financial statements" with the regulations of the order of the RF Ministry of Finance no. 66-n "On financial statement forms of an organization" of July 02, 2010, the author concludes that Russian accounting reports include only "Income Statement", but "Comprehensive Income Statement" is not applicable.

Keywords: financial results, income, profit, Income Statement, IFRS, revenue, balance sheet

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ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

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