Peculiarities of accounting in Russia
Registration and accounting in Russia differs essentially from the other countries.
• One of the main differences is the government dominating position in accounting regulation in the Russian Federation. The principles of registration and accounting in the Russian Federation are defined governmentally and are regulated by special legislative acts – the Law “On accounting” No. 402-FZ dated 06.12.2011, federal and industry-specific standards, regulations on accounting developed and approved by the Ministry of Finance, recommendations of the Central Bank, economic entity standards.
There is no rigid governmental regulation in the USA, the Netherlands, Great Britain and Ireland practicing British-American accounting model. All the norms are developed by the specialized professional organizations. The main guideline is access to securities market. The content of accounting operations is highly informative, its aim is to provide maximum information on the economic entity to the creditors and investors. Correspondingly, the accountant`s task is reduced to get a positive auditors` report.
In Germany, Norway, Austria, France using continental model, legislative regulation of accounting and orientation to the primary need of the state are outlined. Registration and accounting in these countries is subject to macroeconomic governmental plan implementation. The main guideline is strict compliance with the tax legislation and constant budget replenishment.
• In our country accounting is a system for supervision, measurement and registration of data on the property of the economic entity, while in the EU and the USA the performance approach implying a certain result – objective reporting is practiced.
• The specific nature of the Russian accounting is its primarily tax character while in the USA it is considered only from the financial point of view.
• The principle of the information relevance is one of the basic ones in the foreign accounting and is absolutely ignored by the Russian one. As per it, the data shown in the accounting must be essential and of forecasting value.
• The foreign accounting primarily imposes the requirements of soundness and relevance to the information shown in the reporting. In Russia compliance with the normative acts, instructions, regulations, recommendations and provision of official supervision information come ahead.
• For the qualitative characteristics of accounting information in the western models the comprehensibility, relevance, reliability, comparability is given preference. In the Russian accounting the information is primarily evaluated from the point of its exposure, priority of content over the form, diligence.
• The most essential difference is the difference in the accounting principles. The Russian model provides for the strict compliance with the following concepts:
1. Independence – considers the property of the organization apart from the other property of its owners;
2. Double entry – all accounting operations on debit and credit;
3. Operating company – considers the economic entity`s activity in the longer term;
4. Objectivity – demands strict recording of all operations;
5. Prudence – guarantees reliable financial reporting due to its accurate and thoughtful preparation;
6. Accruals – all the operations are recorded at the time of their implementation;
7. Periodicity – provides for regular preparation and delivery of reporting for the certain periods – month, quarter, half a year, year;
8. Confidentiality – the enterprise`s accounting is a trade secret;
9. Money measurement – provides for indication of all operations and performance results in Russian rubles;
10. Succession – strict compliance with the traditions while actively using technical innovations.
In Germany, France and some European countries practicing continental accounting model, its concepts strikingly differ from the Russian ones.
1. Operations completeness – indication of absolutely all movements and results in the reporting;
2. Time-based delimitation – operations recoding as of the date of their completion;
3. Content correspondence – all the operations shall be accurately assessed and recorded;
4. From accuracy – any changes to the initially recorded is strictly prohibited;
5. Clearness and distinctness – all the reporting documents shall be drawn in a way that any controller could understand and correctly interpret them;
6. Timeline – all the operations shall be recorded strictly in the order of the completion.
In the USA, Great Britain, Canada, the Netherlands, Ireland and other countries with British-American accounting model the following concepts are in force.
1. Cost – accounting indication of acquired and sold assets in accordance with the chosen assessment method;
2. Realization – all the company`s income is recorded;
3. Objective evidence – only operations notable and valuable for the company are entered in the accounting records;
4. Compliance – choice of means and period of income registration are interrelated;
5. Materiality – definition of significance level for the company of low-value assets and non-significant operations;
6. Prudence – orientation to potential loss and non-admission of hidden reserve creation;
7. Consistency – strict compliance with accounting principles during the whole period of the enterprise activity, full disclose of all operations.
Quantitative and qualitative difference of accounting concept in Russia, the USA and EU countries is obvious.