Accounting and tax compliance in Russia

Russian legislation defines that accounting is a duty for all economic entities operating in the Russian Federation. This provision is prescribed in federal acts, in particular, Federal Law No. 402-FZ). So the company’s management must ensure that all operations are fully reflected in primary documents and consolidated registers.

The regulatory documents define the objects of accounting:

  • assets in the form of fixed assets and labour assets, intellectual property, goods, cash, financial investments, receivables, and other property;
  • liabilities and costs;
  • facts of economic life during the activity;
  • sources of business financing;
  • income from all sources.

Responsibility for meeting the requirements

According to the current regulations, the head of the company is responsible for meeting all the requirements. Creating conditions for the conduct of accounting is his duty. It i necessary to ensure the ability to organize accounting effectively and perform the main tasks.

Including:

  • preparation of information about the business entity’s activities, financial position, financial result, and cash flow. The information must be complete, reliable, systematized and documented;
  • provision of information to all controlling organizations, in accordance with the legislation of the Russian Federation;
  • prevention of negative consequences by analyzing information and forecasting, minimizing risks;
  • identifying reserves to obtain maximum profit and use the financial, material, and labour resources rationally.

The organization of accounting and document storage is assigned to the head of the company. He is obliged to assign the person responsible for accounting management.

That can be:

  • the chief accountant;
  • another official of this organization authorized by the head of the organization;
  • third-party company or entrepreneur.

The head of the company mustn’t keep accounting records himself, except for some certain cases:

  • the company applies a Simplified Tax System;
  • it is a medium-sized business entity, except for organizations subject to mandatory audit, microfinance organizations, and other organizations, specified in Article 6 of Law No.402-FZ.
The person who is responsible for accounting must have a professional qualification. The requirements for an accountant’s qualification are set out in Article 7 of Law No. 402-FZ. Law No. 402-FZ defines a list of entities that can keep accounting in a simplified form and those that can not keep accounting at all according to the rules of the Russian Federation.

The following organizations can keep records in a simplified form:

  • small business entities, except those subject to mandatory audit;
  • non-profit organizations, except those subject to mandatory audit;
  • other organizations specified in Article 6 of Law No. 402-FZ.

As a general rule, the person charged with accounting is responsible for:

  • accounting policy;
  • the correctness of the methodology and management of the accounting;
  • maintaining tax records;
  • the formation of complete, reliable reports and the timeliness of its transfer to the authorities.
If the organization conducts cash transactions, and there is no cashier position, the manager can assign these duties to another employee. At the same time, it is recommended to conclude a contract with him on full individual financial responsibility, as well as make appropriate additions to the employment contract and job description.

The manager is obliged to organize the internal control system in the company. An essential internal control tool is the definition of the document flow and the authorization policy.

Accounting requirements are mandatory for all employees of the organization.

The main accounting requirements

The system of normative documentation regulating the sphere of accounting is defined by the Law on Accounting and the Russian Federation’s Tax Code. The accounting system has federal and industry standards that all economic entities in the Russian Federation must comply with.

The main accounting requirements contain the following rules:

  • accounting records are kept until the moment of liquidation of the organization;
  • records are maintained using the chart of accounts approved by the Ministry of Finance;
  • there is a primary accounting document on each written fact, and every document contains mandatory details. The list of compulsory banking details is specified in Article 9 of Law No. 402-FZ.;
  • primary documents can be issued both in paper form and in electronic form;
  • the primary accounting documents are recorded in chronological order and transferred to the accounting registers;
  • registration of imaginary objects of accounting is not allowed;
  • accounting items are subject to measurement in the currency of the Russian Federation;
  • maintaining documentation in the Russian language and in rubles (the Russian Federation’s national currency). Suppose settlements are made in a foreign currency or assets, and so are the liabilities. In that case, they must be written down in rubles at the exchange rate of the Central Bank of the Russian Federation on the relevant date.
  • mandatory inventory management;
  • balances on bank accounts and budget settlements must be agreed with the relevant organizations and identical;
  • compliance with accounting policies throughout the organization’s operations;
  • compliance with accounting principles, including completeness and timeliness, prudence, a priority of content over form, compliance with synthetic and analytical accounting data, rationality;
  • separation of accounting for short-term and long-term assets and liabilities. The term criterion is one calendar year;
  • separate accounting of own property and property of third parties;
  • preparation and presentation of accounting statements. The reporting year is a calendar year. The financial statements are prepared in the currency of the Russian Federation;
  • accounting (financial) statements are considered to be prepared if they are signed by the manager;
  • accounting (financial) statements are not a commercial secret.
The legal regulation of the consolidated financial statements is carried out in accordance with No.402-FZ and the Law «On Consolidated Financial Statements " No. 208-FZ dd 27.07.2010.

We have listed the main accounting requirements, but there are other mandatory requirements. To be sure of their compliance, that would be better to use the support of qualified specialists.

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