As to amendments in the legislation on accounting

The relevant Law “On Amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” (regarding the Improvement of Certain Provisions)” was adopted by  Verkhovna Rada and signed by the President on 28 October (hereinafter – the “Amending Law”).

The Amending Law is included by the Cabinet of Ministers onto the list of draft laws relating to the European integration of Ukraine, adoption of which shall ensure Ukraine properly implements the EU-Ukraine Association Agreement.

The Amending Law introduces international accounting standards to be mandatorily applied by major enterprises, although reporting for small business is simplified.

For accounting purposes businesses shall be divided into 4 categories (kinds):

micro-enterprises;

small;

medium;

major.

Classification is based on the book value of assets, net income and the average quantity of employees within an enterprise.

The provisions of Article 5 of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”, being currently effective and stipulating that accounting and financial reporting shall be prepared in Hryvnia, were supplemented with provisions of the Amending Law introducing that financial reporting shall be provided in other currencies upon users’ requests.

Additional requirements are established as to accountants (accounting departments) to enterprises of public interest. Such are: particular types of securities issuers, banks, insurers, other financial institutions as well as major enterprises.

The Amending Law also sets for that minor deficiencies contained in documents on business transaction shall be no grounds to recognize thereof void, provided that such allows to identify a person being the party to such transaction, the essence and price thereof, etc.

As before, the reporting period for the purposes of annual financial reporting package shall be a calendar year. The interim financial reporting shall be prepared referring to results of the first quarter, six and nine months. Also, in accordance with enterprise’s accounting policies other periods may be considered.

The term “the taxonomy of financial reporting package” is introduced, meaning the complex of items and indicators of annual financial reporting package subject to disclosure. The taxonomy of financial reporting package shall be approved by the Ministry of Finance of Ukraine.

Therewith, the procedure and terms for filing annual financial reporting package, consolidated annual financial reporting package, management reports and other shall be determined by the Cabinet of Ministers of Ukraine. The content and forms thereof shall be formalized by the Ministry of Finance of Ukraine.

On top of that, the Amending Law improves the procedure for annual financial reporting package filing and publishing. Thus, enterprises applying international standards, are enabled to file such in an e-form.

Major enterprises other than securities issuers as well as medium enterprises are obliged to publish annual financial reporting package along with the audit report on their web-sites (in full) by 1 June of the year following the reporting period. That is the only provision (omitting same introduced for financial enterprises) to enact on 1 January 2019. The Amending Law, in its turn, shall enact earlier, namely on 1 January 2018.