Bank of Russia presented for public draft guidelines for developing sectoral standards of accounting in the Non-bank Financial Organisations.
1. The Draft Ordinance of the Bank of Russia ‘On Amending Bank of Russia Regulation No. 493-P, dated 1 October 2015, “Sectoral Standard for Accounting Operations to Withdraw (Placement) Funds under Loan Agreements and Bank Deposit Agreements at Non-bank Financial Institutions”
The Draft Ordinance is developed in order to elaborate and update conditions equipping the Non-bank Financial Institutions with the opportunity to avoid applying the effective interest rate method to loan agreements and bank deposit agreements; to introduce a number of practical simplifications to the accounting procedure excluding insignificant aspects in terms of their influence on accounting (financial) reporting; to clarify certain provisions of the sectoral standard of accounting in terms of applying the effective interest method.
2. The Draft Ordinance of the Bank of Russia “On Amending Bank of Russia Regulation No. 501-P, dated 5 November 2015, ‘Sectoral Standard for Accounting of Fund Raising operations under Loan Agreements, credit contracts and Bond and Promissory Note Issuance and Redemption (Repayment) by Non-bank Financial Organisations”.
The Draft Ordinance is elaborated in order to provide Non-bank Financial Organisations with opportunities to not apply the effective interest method (hereinafter referred to as the ESP method) to financial liabilities measured at fair value through profit or loss; and as well as to grant the same relief in the case of the immaterial difference between the depreciated value calculated using the ESP method as a the date of the initial acknowledgements of that financial liability expense and depreciated value determined through application of the straight-line depreciation method of acknowledgement of Interest expenses.
The Draft Ordinance also introduces amendments to the financial reporting procedure for other expenses (transaction costs) in the event of their insignificance in all other categories of financial liabilities, and it also determines the reporting procedure of these expenses under financial liabilities assessed at their fair value through profit or loss.
The Draft Ordinances are planned to enter into force on January 01, 2018.