Azerbaijan, Baku, Jan. 22/ Trend U. Ismaylova/
Azerbaijan's Ministry of Finance announced transfer of all commercial facilities, as well as public organizations to the International Financial Reporting Standards (IFRS) starting from 2009, the Ministry said on Jan. 22. Upon the Law on Accounting dated Jun. 29, 2004, as well as the Law on Insurance Activity dated Mar. 15, 2008, these organizations must prepare financial reports on the basis of the international accounting standards.
Commercial organizations include insurers, re-insurers, as well as legal entities - insurance brokers. Up to now, bank organizations fully passed to a new plan of accounts, though till 2004 they submitted to the National Bank accounts on two standards - international and local.
Social organizations include SOCAR (State Oil Company of Azerbaijan), "Azerenergy", "Bakielectrikshebeke", mobile operator "Azercell", SOCA's units on oil pipelines and marketing and economic operations, PU "Azneft", H. Aliyev refineries and "Azneftyag", ASR, Baku Metro, "AZAL" and its national airline, Caspar, "Azerigaz", "Azerigaznagl", "Azersu", PU "Aztelecom", "Azerkimiya" state company including ethylene polyethylene plants. The most effective work on transition to IFRS is estimated in State Oil Company which PricewaterhouseCoopers international audit company assisted in this process.
All these organizations must submit financial accounts prepared in accordance with IFRS within three months by the end of fiscal year (from Jan. 1 to Dec. 31).
The Ministry of Finance announced a list of financial accounts, which must be submitted by these organizations, and recommended plans of accounts:
- balance sheet;
- account on income and damage
- account on changes in the capital;
- account on money movement;
- accounting policy and notes with comments
According to the Law on Accounting, the introduction of national accounting standards adopted on the basis of the international standards must be completed in commercial organizations by late 2007. In this regard the sequence of standards introduction during 2005-2008 is indicated in the State national accounting standards introduction program. Budget and non-governmental organizations were to complete this process by late 2008, small and average enterprises by Jan. 1, 2006. Deadline for municipalities, budget organizations and state funds was fixed by Jan. 1, 2009. But these terms were changed due to difficulty of this process and preparation of national standards.
In accordance with the list approved by the Cabinet of Ministers, by Jan. 1, 2008, 20 public organizations were to conduct accounting and submit financial reports on the basis of IFRS. Criteria of selection of such organizations are assets which must exceed 100 million manat, annual income 5 million manat but the number of employees must total more 1,000 people.
Official rate on Jan. 22 is 0.8044 AZN/USD.
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