International Financial Reporting Standards (IFRS)
The introduction of mandatory reporting in accordance with IFRS in Ukraine began with amending the Law of Ukraine dated 16 July 1999 No. 996-XIV "On Accounting and Financial Reporting in Ukraine".
International Financial Reporting Standards or IFRS — a set of standards and interpretations that govern the rules for preparing financial statements. They are developed by the International Accounting Standards Board (IASB) and define the reporting rules for entities. Currently, IFRSs are used as the basis for preparation of financial statements by entities in more than 120 countries of the world.
The objective of IFRS is to unify financial statements regardless of the geolocation of the business. The goal is to make the work of entities transparent in order to ensure the stability of financial markets and the development of the world economy. Financial statements prepared in accordance with the requirements of IFRS are a sort of “quality mark” and confirmation that the information provided is reliable.
Who in Ukraine is obliged to apply IFRS?
The Verkhovna Rada of Ukraine amended the law "On Accounting and Financial Reporting in Ukraine" dated 5 October 2017, No. 2164-VIII, whereby Ukrainian entities are obliged to prepare IFRS financial statements that meet the following criteria:
Public interest entities
- issuers whose securities are admitted to trading on stock exchanges or whose securities have been publicly offered
- non-state pension funds
- other financial institutions (except for other financial institutions and non-state pension funds related to micro and small enterprises)
- large enterprises
Large enterprises are enterprises that do not meet the criteria for medium-sized enterprises and whose indicators, as of the date of the annual financial statements for the year preceding the reporting year, meet at least two of the following criteria:
- book value of assets - more than EUR 20 million
- net income from sale of products (goods, works, services) - more than EUR 40 million
- the average number of employees is over 250 people 2.
Public joint-stock companies
Enterprises operating in the extractive industries
Entities performing economic activities by types listed by the Cabinet of Ministers of Ukraine
In addition to the above categories, for which accounting in accordance with International Standards is mandatory, entities can independently decide on the transition to the IFRS accounting model in Ukraine.
Is your company on this list? We offer to order a consultation from BDO Ukraine specialists, who will help you find the right answers.
Benefits of transition to IFRS
Having implemented IFRS, an entity:
- opens the way for listing (quotation) securities on stock markets;
- simplifies negotiations with creditors, investors, insurance and leasing companies;
- simplifies the monitoring and control of foreign-based subsidiaries of an entity.
The economic and reputational benefits are a direct result of the transition to International Accounting Standards.
IFRS services of BDO in Ukraine
A team of certified (ACCA, FCCA) and experienced BDO in Ukraine’s professionals offers comprehensive IFRS services aimed at both ensuring compliance with International Financial Reporting requirements and minimizing disruptions in the clients’ activities.
- Transition to IFRS accounting
- Transformation of financial reporting under IFRS
- Automation of IFRS accounting
- Consulting on IFRS
- Training on IFRS application
BDO will help you understand and prepare for the upcoming changes. Our experts will help you manage this process, assessing the impact of new accounting standards or implementing thereof.
If you need more information or want to order services for the implementation of international financial reporting, please contact BDO in Ukraine’s experts.