Conducting telephone sessions ("hotlines") with taxpayers.

Conducting telephone sessions ("hotlines") with taxpayers.

The State Commission on Securities and Stock Market is carrying out very important work in the direction of building a market infrastructure. However, the infrastructure itself is an important but insufficient condition for further market development. It is necessary to change the mentality of the domestic issuer, its understanding of the importance of cooperation with the investor.

Investors focus on the quality of enterprise management. The portfolio investor does not want to manage the investment object independently, so he wants to be sure that the company’s management is quite capable of coping with its functions.

Since the main thing for the investor is the quality of management, he must visit the company, make sure of the effectiveness of the chosen tactics and work strategy. Thus, every company that wants to attract a Western investor must not only move to International Accounting Standards, but also be fully prepared for the visit of the investor at least once a year.

Investors believe that they need to be informed about the company’s strategy and objectives, the tactics of management, the results of financial activities, financial policies and the amount of profit expected to avoid unpleasant surprises. Particular attention should be paid to quarterly and annual reports. Moreover, the latter should be detailed, distributed to investors on time, not in eight months, should be regularly updated and not be the only reason for a year to meet with the investor.

General requirements for financial reporting

The general requirements for financial reporting are set out in Regulation (Standard) of Accounting 1 (hereinafter – UAS 1), approved by the order of the Ministry of Finance of Ukraine 31.03. 99 No. 87. This provision establishes:

the purpose of financial statements; their composition; reporting period; qualitative characteristics and principles to be followed when preparing financial statements.

UAS 1 should be used in the preparation and submission of financial statements by enterprises, organizations, institutions and other legal entities (hereinafter – enterprises) of all forms of ownership (except for banks and budgetary institutions). However, the rules for preparing consolidated financial statements are not considered here.

The basis of UAS 1 is International Accounting Standard 1 (revised in 1997) of the International Accounting Standards Committee. The main terms used in P (S) BU 1 are given in appendix. 1, P (S) BO 1 – in dod. 2.

The financial statements are defined in UAS 1 as financial statements that reflect the financial condition of the enterprise and the results of its activities for the reporting period. The purpose of such reporting is to provide the general information needs of a wide range of users, and they rely on it as the main source of financial information in making economic decisions (Table 1).

Table. 1. Information needs of the main users of financial statements.

interesting narrative topics

Reporting users

Information needs

Investors, owners

Acquisition, sale and possession of securities. Participation in the capital of the enterprise Assessment of the quality of management Determining the amount of dividends to be distributed

Enterprise management

Regulation of enterprises

Banks, suppliers and other lenders

Securing the obligations of enterprises Assessment of the ability of the enterprise to meet its obligations in a timely manner


Assessment of the company’s ability to meet its obligations in a timely manner

Employees of the enterprise

Assessment of the company’s ability to meet its obligations in a timely manner. Securing the company’s obligations to employees

Public administration bodies

Formation of macroeconomic indicators


Public authorities have now become one of these users, rather than the only one to constantly dictate their requirements, changing them to the needs of tax law. This is a recognition of the fact that taking into account the needs of the investor (owner) and other parties involved in business activities is no less important than the interests of the state in obtaining taxes. After all, if no one will invest in business, then no one will pay taxes.

To make economic decisions, users of financial statements need information about the financial condition, results of operations and changes in the financial condition of the enterprise. These information needs determined the composition of financial statements. According to P (S) BU 1, it includes:

balance; report on financial results; Statement of Cash Flows; statement of equity; notes to reports.

Other reports (appeals of the board of directors to shareholders, report of the company’s management, auditor’s report, etc.), which are included in the company’s reporting, are not financial statements.

The new reporting structure fully complies with the requirements of International Accounting Standards.

The components of financial statements reflect different aspects of the same business transactions and events for the reporting period, the relevant information of the previous reporting period and the disclosure of accounting policies and changes, which makes possible a retrospective and future analysis of the enterprise (Table 2).

Components of the financial statements, such as the balance sheet, statement of financial performance, statement of equity and statement of cash flows, consist of items that are grouped into appropriate sections.

Table 2. Purpose of the main components of financial statements.

Components of financial reporting


Use of information


Availability of economic resources that are controlled by the enterprise at the balance sheet date

Assessment of the structure of enterprise resources, their liquidity and solvency of the enterprise: forecasting future loan needs; estimating and forecasting changes in economic resources that the enterprise is likely to monitor in the future

Statement of financial results

Revenues, expenses and financial results of the enterprise for the reporting period

Assessment and forecast: profitability of the enterprise: the structure of income and expenses

Statement of equity

Changes in the equity of the enterprise during the reporting period

Estimation and forecast in equity

Statement of Cash Flows

Generation and use of cash during the reporting period

Assessment and forecast of operating, investment and financial activities of the enterprise


Selected accounting policies Information is not maintained directly in the financial statements, but is required by the UAS Additional analysis of the reporting items required to ensure their clarity

Assessment and forecast: accounting policy; risks or uncertainties that affect the enterprise, its resources and liabilities; activities of divisions of the enterprise, etc.


Forms, list of items of financial statements and their content are set out in UAS 2-5. However, an enterprise enters information in one or another item of the relevant financial report only when:

there is a possibility of increasing or decreasing the future economic benefits associated with this article; the evaluation of the article can be reliably determined.

Here is an example. According to Instruction No. 139 on the procedure for compiling the annual financial report, the company has the right to reflect in the balance sheet as part of settlements with other debtors fines, penalties and penalties recognized by the debtor or received decisions of court, arbitral tribunal or other authorized body to collect them (see § 2.25 of the Instructions).

As you can see, in this case, preference is given to formal features (confirmation by the debtor or the body authorized to collect fines, penalties and penalties), although the right to receive the relevant amounts the company has under applicable law (or directly under the terms of supply or contract) on the same basis can fairly reliably determine the amount of future cash inflows.

Therefore, under UAS 1 there is no need to wait for such confirmation, but the amount of receivables should be reflected in the balance sheet. Of course, the company must still assess the degree of solvency of the debtor, other factors related to this situation. The validity of the decision of the company’s management on this amount will be assessed by the auditor.

The first criterion for reflecting items in the financial statements is related to which report will be presented – in the balance sheet or in the statement of financial performance, ie the compliance of business results with the definition of assets, liabilities, equity, income or expenses that given in P (S) BU 1.

Under IAS, the future economic benefits embodied in an asset are the potential for a direct or indirect increase in cash and cash equivalents.

The second criterion helps to determine whether the results of a business transaction will be reflected in the financial statements, which are only disclosed in the notes to them. In both cases, it is only significant information, ie such, the absence of which may affect the decisions of users of financial statements.

The process of analyzing financial information for compliance with the definition of a particular item in the financial statements and the description of the criteria is called recognition.


Carrying out large-scale mass explanatory work of tax legislation. Abstract

Introduction of the institute of volunteers of the tax service of Ukraine (public tax consultants). Conducting telephone sessions ("hotlines") with taxpayers. "Hotline"

Introduction of the Institute of Tax Service Volunteers of Ukraine (public tax consultants)

With the constant growth of the number of business entities on the one hand and the limitation of the number of employees of the tax authorities who carry out this important work, on the other hand, there is a need to constantly find new ways and methods of its implementation.

In developed countries, quite effective methods have already been found to solve this problem. One of them is the involvement of public tax consultants from among students, retirees and former employees of tax authorities.

The institute of volunteers – public tax consultants is being created in the structure of the State Tax Service to carry out large-scale public awareness work on tax legislation among the population and to form the appropriate level of its tax culture.