International Financial Reporting Standards (IFRS) and their application
These are accounting standards already developed and adopted in practice, with a clear list of mandatory transactions and information to be displayed in the final reports of the enterprise. International requirements to conduct financial and economic activities of companies specially created by the Council on International Financial Reporting Standards are formed. The assistance of FChain professionals in IFRS matters is necessary if the company operates on the international market.
The main purpose of IFRS application is to support stability and maximum transparency of the world of finance, business and solutions. Only then will the company be able to attract the attention of investors by demonstrating its own development and expansion. This is especially true for the European Union, Asia and South America. Uzbekistan is not an exception. It is compliance with IFRS requirements that is a strong argument to competitors, as for investors this point is often a decisive criterion that guarantees the correctness of the choice itself.
Important details of IFRS in Uzbekistan from FChain
International financial reporting standards are regularly supplemented by new requirements, so all decisions taken should be monitored in a timely manner and implemented as quickly as possible in the practice of your own enterprise. Only an experienced professional can cope with this volume of tasks and obligations. In addition to regularly studying such requirements, it is essential to comply with the existing draft laws on the territory of Uzbekistan. Financial reporting and accounting must meet all requirements.
Professional assistance in such cases is also necessary for companies that are only planning to reach the international level. The integration of the whole department consists of a lot of nuances, for example, the detail of the financial balance sheet of the company may differ significantly from the usual system of work of the company, but is a mandatory requirement for such a transition. IFRS standards in Uzbekistan are relevant for managers wishing to provide clear financial results to foreign co-owners of the business itself. For example, a cash and revenue report is processed in different numbers and you cannot compare the two reports. Which of the branches is doing better can only be learned from similar reports that comply with accepted international standards. IFRS financial statements confirm the reliability of the company and conduct an honest transparent business with clear compliance with all legislative requirements.
The main criteria for compliance with IFRS are:
- Fixed asset accounting;
- Calculation of income taxes in compliance with Uzbek legislation;
- Formation of interim financial reports of the enterprise;
- Cash flow;
- investment property.
The assistance of the FChain team is not only to solve technical nuances and implement the necessary software. The training of specialists also concerns the study of calculation of new indicators of profitability of the company’s work. At the same time, the result may differ and not always for the better.
Nuances and problems in transition to IFRS in Uzbekistan
The problem of transition to IFRS in Uzbekistan is due to the contradictory international requirements and norms of the legislation of the country itself. It is adequate to assess the situation and correctly resolve all issues under the power of only real experienced professionals. After all, any of the decisions have their own risks, which means that they should be carefully weighed even before signing any contracts and documents.
One of the most serious problems in the implementation of IFRS in Uzbekistan is the clear translation of international requirements into the local language. The process is accompanied by further clarification and clarification. The necessary adjustments take a lot of time and work resources, which means that there is a risk of delays and additional costs. Any of the calculations has economic content, and may require additional legal support. If, under international requirements, any monetary transaction is an already confirmed event, the local tax inspectorate may need documentary confirmation.
Among the nuances of the implementation of IFRS in the territory of Uzbekistan in the work of the company are also possible:
- Non-conformity of international requirements with traditions and national peculiarities of the country;
- Significant differences in the level of economic development;
- Insufficient competence of regular specialists;
- Difficulties in decrypting the terminology used and translating it;
- Differences between the current legal norms of Uzbekistan and the principles of IFRS.
The application of IFRS requirements in practice should be balanced and cost-effective. How great the chances of entering the international market and attracting foreign investors can be determined only by a real professional. That is why the assistance of FChain team in the process of implementation of audit standards and international principles of financial reporting is relevant among businessmen of Uzbekistan. At the same time, all services are provided in a comprehensive manner, which means that the economic benefit will be accompanied by legal competent protection and meticulous work of financiers.