The Bank of Russia intends to adjust one of the financial industry accounting standards

The Bank of Russia has prepared a draft of amendments to the industry standard for accounting:

  • of fixed assets;
  • intangible assets;
  • investment property;
  • long-term assets intended for sale;
  • inventory;
  • labour items received under contracts of compensation or collateral, the purpose of which is not defined;
  • property received in connection with the refusal of the policyholder (beneficiary) from ownership of the insured property in non-credit financial organizations.

These amendments are expected to take effect on January 1, 2021.

In particular, it is proposed to clarify the accounting of reserves for inventory impairment.

It is also suggested to prescribe provisions that should be followed by a non-credit financial organization that uses simplified accounting when reflecting inventory accounting on accounts.

Another amendment relates to the accounting of inventory after initial recognition. A non-credit financial organization (except for a non — credit non-profit financial organization and a non-credit financial organization applying simplified accounting) must measure inventory in accordance with IFRS (at the lower of cost or net realizable value).