The preparation and filing of consolidated financial statements is governed by the Federal law No. 208-FZ “About consolidated financial statements” as of 27th July 2010 in accordance with International Financial Reporting Standards (IFRS).
The Russian legislator is setting standards related to the preparation of consolidated financial statements in accordance with the IFRS. The objective is to make Russian corporations more transparent and attractive to foreign investors.
Information about basic principles of financial statements filing in Russia:
- Financial statements have to be filed with the Federal Taxation Service (FNS) and the Federal State Statistics Service (Rosstat). Since 2014 the format of filing is electronic.
- Filing with the Federal Taxation Service (FNS) is governed by Federal Law No. 402-FZ as of 06th November 2011 “About accounting”, which stipulates the frequency of filings:
- Quarterly (for internal accounting only),
- Yearly: It is an obligatory requirement to file financial statements with the Federal Taxation Service (FNS). The filing is treated as a commercial secret; not accessible to the public.
- Financial statements filed with the Federal State Statistics Service (Rosstat) are made available to the public for a fee; on-line is not available.
- Compliance: Corporations failing to submit financial statements, or submit such statements incomplete or containing errors, a fine of maximum EUR 80 will imposed. Rosstat recently drafted new regulations with the intent to increase the fine by tenfold for failing to submit financial statements to Rosstat.
- Since 2013 small companies with a low asset base are also obliged to file financial statements but in a simplified way.
- Financial entities file their accounts with the Central Bank of the Russion Federation
- Sole traders, branches, representative offices, government and budget entities, the Central Bank of the RF are exempt from filing with Rosstat
- According to the Federal Law No. 129-FZ as of 21st November 1996 “About accounting”, Article 16, data of financial statements are to be published in papers and specialized editions and particularly are to be filed with the Rosstat which makes it open on requests. Thus, information companies are entitled to process and distribute financial statements, which are available as data files, because they were initially provided by the official state body
- There is no official ban on foreigners to having access to financial statements of Russian corporations, but requests from abroad will probably be taken up individually
As of 2014 the number of entities required to prepare, submit and publish consolidated financial statements in accordance with IFRS, was significantly expanded. They include:
- credit institutions of any legal structure
- insurance companies (except health insurance companies, operating exclusively in the field of obligatory health insurance)
- non-state pension funds
- management companies of investment funds, mutual funds and non-state pension funds
- clearing houses
- federal state unitary corporations (the list is approved by the Government of the Russian Federation)
- open joint stock companies with state shareholding (the list is approved by the Government of the Russian Federation)
- other listed entities including joint stocks which securities are admitted for exchange trading
Methods used for the consolidation of financial statements depends on the shareholdings of the parent company. For subsidiaries with a majority ownership (share:50 or more) the ‘Purchase’ method is to be used. For associated companies and joint ventures (share: 20% up to 49%) – the ‘equity’ method is to be used. Some requirements are common regardless of the chosen method: statements of parent company and associated company must be prepared as of the same accounting date and must comply with the unified accounting policy IFRS.
Financial statements of Russian companies as well as company credit reports can be requested off-line or obtained on-line from the Information and Analytical System Globas-i® developed by Credinform (Russia). http://www.credinform.ru/en-US/globas.