7 Accounting Changes Effective From 2018
Certain amendments to the Accounting and Financial Reporting Law of Ukraine will come into effect from 2018. They will align our legislation with European laws. Below we look at seven key changes.
1. The lawmakers have amended the definition of “accounting policy”. This term will be defined as a set of principles, methods, and procedures to be used by an enterprise not only to prepare and present its accounts but also to be mandatorily used for its accounting purposes.
2. The following new terms will be introduced: “incomes”, “expenses”, “net income from sales of products (goods, works, services)”, and “taxonomy of financial reporting”.
3. The accounting and financial reporting principles will undergo some quantitative changes. Prudence, historical (actual) cost and periodicity will disappear from their list. Meanwhile, a new clause will be inserted to enable enterprises to apply other principles as defined by international standards or national accounting regulations (standards) or national public sector accounting regulations (standards) (depending on which standards are applied by the enterprise).
4. Insignificant shortcomings in source documents will have different implications. Article 9 of the Law will be supplemented with paragraph 8 providing that insignificant shortcomings in documents containing information about a business transaction do not constitute grounds for non-recognition of the business transaction, provided that such shortcomings do not prevent identification of the person who participated in this business transaction.
5. Article 2 of the Law will set out criteria for classifying enterprises as microenterprises, small enterprises, medium-sized enterprises and large enterprises.
|Book value of assets||Net income from sales of products (goods, works, services)||Average headcount|
|Microenterprises||up to EUR 350 thous.||up to EUR 700 thous.||up to 10 persons|
|Small enterprises||up to EUR 4 mln.||up to EUR 8 mln.||up to 50 persons|
|Medium-sized enterprises||up to EUR 20 mln.||up to EUR 40 mln.||up to 250 persons|
|Large enterprises||over EUR 20 mln.||over EUR 40 mln.||over 250 persons|
For an enterprise to fall into a certain category, it must meet at least two of the above criteria.
6. The list of persons capable of providing accounting services has been extended. Article 8 of the Law will contain a longer list of organizational forms for engagement in accounting. Previously, the Law provided for the provision of accounting services on a contractual basis by an individual entrepreneur, a centralized accounting department or an audit firm, while starting from January 2018, this list will also include enterprises and self-employed persons engaged in the accounting business.
7. Accounts will no longer constitute confidential information. Article 14 of the Law will be amended. Enterprises will have to provide a copy of their accounts and consolidated accounts at the request of individuals and legal entities in the manner prescribed by the Law “On Access to Public Information”. In particular, upon receipt of a request for provision of accounts, the enterprise must furnish all relevant information within five days.
A more detailed overview of all these changes is available at this link.
Maryna Tomash, Counsel, Head of Tax Consulting and Accounting Services