PBU 23/2011 “Cash Flow Report”, as amended 2020

Starting with the reporting for 2011, the forms of financial statements* have changed, and in addition, by order No. 11n dated 02/02/2011, the Ministry of Finance of Russia approved the new PBU 23/2011 Cash Flow Statement. For the first time in Russian practice, a standard has appeared on how to reflect cash and its flows in the cash flow statement. The standard is mainly aimed at more detailed disclosure of the principles of classification of cash flows, it provides more detailed explanations and definitions. L.P. comments on the changes. Fomicheva, certified auditor of the Ministry of Finance of Russia, tax consultant.

Note:

* Read more in issue 4 (April) of “BUKH.1S” for 2011, page 18.

The cash flow statement (hereinafter referred to as the cash flow statement) is one of the mandatory forms of financial reporting for an organization. It allows the user to assess the ability of the company's assets to generate cash during business operations, which is one of the most important criteria when analyzing the success and stability of its work. The purpose of forming the cash flow statement is to provide users with information about the sources of cash inflows and directions of their spending, account balances, that is, about the events that actually occurred, and the data for the period are only summarized as of a specific reporting date and no adjustments are expected. Traditional users of this report are banks that provide loans to the company, as well as lenders that sell assets (work, services) to the company with subsequent payment.

The format of the ODDS, which organizations must draw up since 2011, was approved by order of the Ministry of Finance of Russia dated July 2, 2010 No. 66n. Compared to the report format used before 2011, at first glance, the changes have been minor. Each group of lines dedicated to a separate type of activity ended in the previous form with the indicator “Net cash” for current (investing, financial) activities. The indicator was calculated as the difference between inflow and outflow. In the new proposed form, the name of the final line has been changed; it is called “Cash Flow Result” for the corresponding type of activity. In addition, at the end of the report, the overall “Result of cash flow for the reporting period” is shown by adding up all flows. Then the “Cash balance at the beginning of the reporting period” is indicated; in the previous form, the report began with this line. Then, by adding the result of the cash flow for the period and the balance at the beginning of the period, the value of the line “Cash balance at the end of the reporting period” is obtained. The remaining changes concern detailed explanations of the components of cash flow for each type of activity.

In international reporting, the preparation of capital income tax is regulated by IAS 7 Cash Flow Statements. In Russian practice, until now, accountants have been guided by the instructions for filling out this report, which were given in paragraphs 15 and 16 of the Instructions on the procedure for drawing up and presenting financial statements, approved. by order of the Ministry of Finance of Russia dated July 22, 2003 No. 67n. But this document has lost force since 2011 due to changes in the forms of financial statements.

And so, by order No. 11n dated 02.02.2011, the Ministry of Finance of Russia approved the new PBU 23/2011 “Cash Flow Report” (hereinafter referred to as PBU 23). The order was registered with the Ministry of Justice of Russia on March 29, 2011 No. 20336.

For the first time in Russian practice, a standard has appeared on how to reflect funds and their flows in ODDS. Let's say right away: the standard is mainly aimed at a more detailed disclosure of the principles of classification of cash flows; it provides more detailed explanations and definitions. The rules for compiling this report using the direct and indirect method, as provided for in IAS 7, are not mentioned in it. Therefore, as before, ODDS should be compiled on the basis of actual data on cash flows. But PBU establishes some features when reflecting individual transactions, which we will discuss later. In addition, the standard requires disclosure of additional information about cash flows in financial statements.

PBU 23 comes into force starting with the financial statements for 2011. Therefore, when filling out the new ODDS form, commercial organizations (except credit institutions) should be guided by the new standard (clause 1 of PBU 23). Of course, this applies to cases where the compilation, presentation or publication of the ODDS is required by law. If an organization decides to voluntarily present ODDS to users, then it must also apply PBU 23.

This PBU does not apply when preparing internal reporting, reporting for state statistical surveillance or for special purposes (for example, presented to a credit institution at its request).

ODDS is presented as part of the explanations to the balance sheet and the profit and loss statement (clause 5 of PBU 23).

Paragraph 4 of PBU 23 establishes that general requirements for reporting forms apply to this report. Let us recall that such requirements are established, in particular, by paragraphs 5-17 of PBU 4/99 “Accounting statements of an organization.”

Determination of cash and cash equivalents

In the previous form of ODDS it was indicated that it was possible to provide information on the movement of not only cash, but also their equivalents. However, there was no definition of the term cash equivalents in Russian standards. And many companies have used the definition given in IAS 7.

And so, in paragraph 6 of PBU 23, they finally gave a definition of cash equivalents, information on the movement of which, together with cash, is presented in the ODDS. Cash equivalents are short-term, highly liquid financial investments that can be easily converted into a known amount of cash and are subject to an insignificant risk of changes in value.

What does short-term mean?

IAS 7 proposes to consider a three-month repayment period or another similarly short period as the time criterion for cash equivalents. In fact, we find indirect confirmation that Russian companies can focus on this period in subparagraph h) of paragraph 9 of PBU 23, which provides examples of current cash flows. Among other things, this subclause states that these may include cash flows on financial investments acquired for the purpose of resale in the short term (usually within three months).

The company must independently establish and consolidate in its accounting policies exactly which financial investments it will include in cash equivalents, based on determining their short-term nature, liquidity and exposure to an insignificant risk of changes in value.

Investments in shares of other organizations do not qualify as cash equivalents unless they are purchased with the intention of resale in the near future (for example, shares of large companies purchased for the purpose of speculating on their price). Typically, cash equivalents are intended more to pay off short-term obligations (for example, highly liquid bills that will be used to pay a supplier) rather than for investment.

Examples of cash equivalents include highly liquid bills or bonds, demand deposits and short-term bank deposits that are opened to manage an organization's cash flows in order to earn interest income.

ODDS does not show the transfer of cash or cash equivalents from one form to another. After all, this will lead to double the flow. The transfer of money into cash equivalents (their acquisition) and the receipt of money from the redemption of these equivalents are not cash flows.

Example 1

Cash flow classification

Drawing up the ODDS consists of distributing all receipts (inflows) of funds and their expenses (outflows) by type of activity.

As before, in ODDS cash flows are presented in the context of current, investment and financial activities (clause 7 of PBU 23). The definitions of activities themselves have become more detailed and closer to IAS 7.

It is important that the new provision provides many examples of classifying most types of income and expenses into specific types of activities.

Current cash flows

Cash flows from current activities are formed mainly in the course of the main activities that generate the organization's revenue. Thus, they are usually the result of operations that affect the formation of net profit (clause 9 of PBU 23).

Cash generated by current operations is the most important indicator of whether a given category of activity generates enough cash to repay loans, maintain operations at existing levels of productivity, pay dividends, and make new investments without seeking outside financing. Analysis of current flows from previous periods is used to forecast future current flows in conjunction with other information.

Examples, in particular, are (clause 9 of PBU 23):

• receipts from sales to customers (they are reflected in line 4111 of the ODDS form, approved by Order of the Ministry of Finance of Russia dated July 2, 2010 No. 66n);
• income from the rental of property, royalties, fees, commissions and other income (line 4112);
• payments to suppliers of materials, goods, works and services (line 4121);
• remuneration of employees, including payments in their favor to third parties (line 4122);
• income tax payments, unless they are related to financial or investment activities;
• payment of interest on debt obligations (line 4123), with the exception of interest that is included in the cost of investment assets according to the rules of PBU 15/2008;
• receipt of interest on receivables from buyers (customers);
• cash flows on financial investments purchased for the purpose of resale in the short term (usually within three months).

Cash flows from investing activities

Cash flows from investment activities are associated with the movement of non-current assets and provide cash receipts in the future (clauses 7, 10 of PBU 23).

Examples of such flows include:

• payments to suppliers (contractors) and employees of the organization in connection with the acquisition, creation, modernization, reconstruction and preparation for use of non-current assets, including R&D costs or their sale (line 4221);
• payment of interest on debt obligations included in the cost of an investment asset according to the rules of PBU 15/2008;
• payments in connection with the acquisition (sale) of shares (participatory interests) in other organizations, debt securities (rights to claim funds from other persons), not related to cash equivalents (line 4222);
• provision of loans to other persons and their repayment;
• dividends and similar income from equity participation in other organizations (line 4212);
• receipts of interest on debt financial investments, with the exception of those acquired for the purpose of resale in the short term (line 4212).

Financial activities

Financial activity changes the size and structure of the organization's equity capital and its loans and borrowings. Such flows help creditors and shareholders (participants) predict future cash flows and borrowing needs.

Examples of financial cash flows are (clause 11 of PBU 23):

• cash contributions from owners (participants), proceeds from the issue of shares, increases in participation interests (line 4313);
• payments to shareholders (participants) in connection with the repurchase of shares (participatory interests) of the organization from them or their withdrawal from the membership;
• payment of dividends and other payments for the distribution of profits in favor of owners (participants). They are reflected on line 4322;
• proceeds from the issue of bonds, bills and other debt securities and payments in connection with their repayment;
• receipt (repayment) of loans and borrowings from other persons (lines 4311 and 4321).

Cash flows that cannot be clearly classified are classified as current.

Sometimes it may be necessary to split one operation into several activities. For example, if, when repaying a loan, the sum of the debt and interest is paid in a single amount, then the amounts should be divided for the purpose of being reflected in the ODDS. Debt repayment should be shown as a financial flow, and interest should be attributed to current activities (clause 13 of PBU 23).

PBU 23/2011 “Cash Flow Statement”

Approved by order of the Ministry of Finance of the Russian Federation dated 02.02.2011 No. 11n.

I. General provisions

1.

This Regulation establishes the rules for drawing up cash flow statements by commercial organizations (with the exception of credit organizations) that are legal entities under the laws of the Russian Federation (hereinafter referred to as organizations).

2.

This Regulation applies to the preparation of a cash flow statement in cases where the preparation, and (or) presentation, and (or) publication of this report are provided for by the legislation of the Russian Federation or regulations, and also when the organization voluntarily decided to present and (or) ) publication of such a report.

This Regulation does not apply when compiling an organization’s reporting for internal purposes, reporting compiled for state statistical observation, reporting information submitted to a credit organization in accordance with its requirements, and reporting information for other special purposes, if the rules for compiling such reporting and information do not provide for application of this Regulation.

3.

The cash flow statement is part of the organization's financial statements.

4.

The cash flow statement is prepared on the basis of the general requirements for the organization's financial statements established by regulatory legal acts on accounting, and the requirements established by these Regulations.

5.

The cash flow statement is a summary of cash and highly liquid financial investments that can be easily converted into a known amount of cash and that are subject to an insignificant risk of changes in value (hereinafter referred to as cash equivalents). Cash equivalents may include, for example, demand deposits opened with credit institutions.

6.

The cash flow statement reflects the organization's payments and receipts of cash and cash equivalents to the organization (hereinafter referred to as the organization's cash flows), as well as the balances of cash and cash equivalents at the beginning and end of the reporting period.

The organization's cash flows are not:

A)

payments of funds associated with investing them in cash equivalents;
b)
cash receipts from the repayment of cash equivalents (excluding accrued interest);
c)
foreign exchange transactions (excluding losses or benefits from the transaction);
d)
exchange of some cash equivalents for other cash equivalents (excluding losses or benefits from the transaction);
e)
other similar payments to the organization and receipts to the organization that change the composition of cash or cash equivalents, but do not change their total amount, including receiving cash from a bank account, transferring funds from one account of the organization to another account of the same organization .

II. Cash flow classification

7.

The organization's cash flows are divided into cash flows from current, investment and financial operations.

8.

An organization's cash flows are classified depending on the nature of the transactions with which they are associated, as well as on how information about them is used to make decisions by users of the organization's financial statements.

9.

An entity's cash flows from transactions related to the entity's ordinary activities that generate revenue are classified as cash flows from current operations. Cash flows from current operations are usually associated with the formation of profit (loss) of the organization from sales.

Information on cash flows from current operations shows users of the organization's financial statements the level of provision of the organization with funds sufficient to repay loans, maintain the organization's activities at the level of existing production volumes, pay dividends and new investments without attracting external sources of financing. Information about the composition of cash flows from current operations in previous periods, combined with other information presented in the entity's financial statements, provides the basis for forecasting future cash flows from current operations.

Examples of cash flows from current operations are:

A)

proceeds from the sale of products and goods to buyers (customers), performance of work, provision of services;
b)
receipts of rental payments, royalties, commissions and other similar payments;
c)
payments to suppliers (contractors) for raw materials, materials, work, services;
d)
remuneration of the organization’s employees, as well as payments in their favor to third parties;
e)
payments of corporate income tax (except for cases where corporate income tax is directly related to cash flows from investment or financial transactions);
f)
payment of interest on debt obligations, with the exception of interest included in the cost of investment assets in accordance with the Accounting Regulations “
Accounting for expenses on loans and credits
” (PBU 15/2008), approved by order of the Ministry of Finance of the Russian Federation dated October 6, 2008 No. 107n ( registered with the Ministry of Justice of the Russian Federation on October 27, 2008, RN 12523) as amended by orders of the Ministry of Finance of the Russian Federation dated October 25, 2010 No. 132n (registered with the Ministry of Justice of the Russian Federation on November 25, 2010, RN 19048), dated November 8, 2010 No. 144n (registered with the Ministry of Justice of the Russian Federation on December 1. 2010, RN 19088) (hereinafter referred to as PBU 15/2008);
g)
receipt of interest on receivables from buyers (customers);
h)
cash flows on financial investments acquired for the purpose of resale in the short term (usually within three months).

10.

Cash flows of an organization from transactions related to the acquisition, creation or disposal of non-current assets of the organization are classified as cash flows from investment transactions.

Information on cash flows from investment transactions shows users of the organization's financial statements the level of the organization's expenses incurred to acquire or create non-current assets that provide cash flows in the future.

Examples of cash flows from investment transactions are:

A)

payments to suppliers (contractors) and employees of the organization in connection with the acquisition, creation, modernization, reconstruction and preparation for use of non-current assets, including costs of research, development and technological work;
b)
payment of interest on debt obligations included in the value of investment assets in accordance with
PBU 15/2008
;
c)
proceeds from the sale of non-current assets;
d)
payments in connection with the acquisition of shares (participatory interests) in other organizations, with the exception of financial investments acquired for the purpose of resale in the short term;
e)
proceeds from the sale of shares (participatory interests) in other organizations, with the exception of financial investments acquired for the purpose of resale in the short term;
f)
providing loans to other persons;
g)
repayment of loans provided to other persons;
h)
payments in connection with the acquisition of debt securities (rights to claim funds against other persons), with the exception of financial investments acquired for the purpose of resale in the short term;
i)
proceeds from the sale of debt securities (rights to claim funds against other persons), with the exception of financial investments acquired for the purpose of resale in the short term;
j)
dividends and similar income from equity participation in other organizations;
k)
receipts of interest on debt financial investments, with the exception of those acquired for the purpose of resale in the short term.

11.

An organization's cash flows from transactions related to the organization's attraction of financing on a debt or equity basis, leading to changes in the size and structure of the organization's capital and borrowings, are classified as cash flows from financial transactions.

Information about cash flows from financial transactions provides the basis for forecasting the claims of creditors and shareholders (participants) in relation to the organization's future cash flows, as well as the organization's future needs for raising debt and equity financing.

Examples of cash flows from an organization's financial transactions are:

A)

cash contributions from owners (participants), proceeds from the issue of shares, increases in participation interests;
b)
payments to owners (participants) in connection with the repurchase of shares (participatory interests) of the organization from them or their withdrawal from the membership;
c)
payment of dividends and other payments for the distribution of profits in favor of the owners (participants);
d)
proceeds from the issue of bonds, bills, and other debt securities;
e)
payments in connection with the redemption (redemption) of bills and other debt securities;

e)

obtaining loans and borrowings from other persons;

and)

return of loans and borrowings received from other persons.

12.

Cash flows of an organization that cannot be unambiguously classified in accordance with paragraphs 8 - 11 of these Regulations are classified as cash flows from current operations.

13.

Payments and receipts from the same transaction may be different types of cash flows. For example, payment of interest is cash flow from current operations, and repayment of principal is cash flow from financing operations. When repaying a loan in cash, both of these parts can be paid in one amount. In this case, the organization divides a single amount into appropriate parts, followed by separate classification of cash flows and their separate reflection in the cash flow statement.

III. Reflection of cash flows

14.

The organization's cash flows are reflected in the cash flow statement, subdivided into cash flows from current, investing and financial operations.

15.

Each significant type of income to the organization of cash and (or) cash equivalents is reflected in the cash flow statement separately from the organization's payments, unless otherwise provided by these Regulations.

16.

Cash flows are reflected in the cash flow statement on a net basis in cases where they characterize not so much the activities of the organization as the activities of its counterparties, and (or) when receipts from some persons determine corresponding payments to other persons. Examples of such cash flows are:

A)

cash flows of a commission agent or agent in connection with the provision of commission or agency services (except for fees for the services themselves);
b)
indirect taxes as part of receipts from buyers and customers, payments to suppliers and contractors and payments to the budgetary system of the Russian Federation or reimbursement from it.
c)
receipts from the counterparty for reimbursement of utility bills and making these payments in rental and other similar relationships;
d)
payment for transportation of goods with receipt of equivalent compensation from the counterparty.

17.

Cash flows are shown on a net basis in the cash flow statement in cases where they are characterized by rapid turnover, large amounts and short repayment periods. Examples of such cash flows are:

A)

mutually determined payments and receipts for settlements using bank cards;
b)
purchase and resale of financial investments;
c)
making short-term (usually up to three months) financial investments using borrowed funds.

18.

The indicators of the organization's cash flow statement are reflected in the currency of the Russian Federation - rubles.

The amount of cash flows in foreign currency is converted into rubles at the official exchange rate of this foreign currency to the ruble, established by the Central Bank of the Russian Federation on the date of payment or receipt. If there is an insignificant change in the official exchange rate of a foreign currency to the ruble, established by the Central Bank of the Russian Federation, conversion into rubles associated with the performance of a large number of similar transactions in such foreign currency can be carried out at the average rate calculated for a month or a shorter period.

If, immediately after receiving foreign currency, an organization, as part of its normal activities, changes the received amount of foreign currency into rubles, then the cash flow is reflected in the cash flow statement in the amount of rubles actually received without intermediate conversion of foreign currency into rubles. If, shortly before a payment in foreign currency, an organization, as part of its normal activities, exchanges rubles for the required amount of foreign currency, then the cash flow is reflected in the cash flow statement in the amount of rubles actually paid without intermediate conversion of foreign currency into rubles.

19.

Balances of cash and cash equivalents in foreign currency at the beginning and end of the reporting period are reflected in the cash flow statement in rubles in the amount determined in accordance with the Accounting Regulations “
Accounting for assets and liabilities, the value of which is expressed in foreign currency
” ( PBU 3/2006), approved by order of the Ministry of Finance of the Russian Federation dated November 27, 2006 No. 154n (registered with the Ministry of Justice of the Russian Federation on January 17, 2007, RN 8788) as amended by orders of the Ministry of Finance of the Russian Federation dated December 25, 2007 No. 147n (registered with the Ministry of Justice of the Russian Federation on January 28, 2008, RN 11007), dated October 25, 2010 No. 132n (registered with the Ministry of Justice of the Russian Federation on November 25, 2010, RN 19048). The difference arising in connection with the recalculation of the organization's cash flows and cash balances and cash equivalents in foreign currencies at rates on different dates is reflected in the cash flow statement separately from the organization's current, investing and financial cash flows as the impact of changes in the foreign currency exchange rate against the ruble.

20.

Significant cash flows of the organization between it and business companies or partnerships that are subsidiaries, dependent or main in relation to the organization are reflected separately from similar cash flows between the organization and other persons.

IV. Disclosure of information in financial statements

21.

If an organization provides additional explanations to any indicator in the cash flow statement in its financial statements, then the corresponding article in the cash flow statement must contain a link to these explanations.

22.

The entity discloses the composition of cash and cash equivalents and reconciles the amounts presented in the cash flow statement with the corresponding balance sheet items.

23.

The organization discloses, as part of the information on its adopted accounting policies, the approaches used for separating cash equivalents from other financial investments, for classifying cash flows not specified in paragraphs 9 - 11 of these Regulations, for converting cash flows in foreign currency into rubles, for a collapsed presentation cash flows, as well as other explanations necessary to understand the information presented in the statement of cash flows.

24.

The organization discloses the opportunities available as of the reporting date to raise additional funds, including:
a)
the amount of credit lines open by the organization, but not used by it, indicating all established restrictions on the use of such credit resources (including the amounts of mandatory minimum (irreducible) ) residues);
b)
the amount of funds that can be received by the organization on overdraft terms;
c)
guarantees received by the organization from third parties that were not used as of the reporting date to obtain a loan, indicating the amount of funds that the organization can attract;
d)
the amount of loans (credits) not received as of the reporting date under concluded loan agreements (credit agreements), indicating the reasons for such shortfall.

25.

The organization discloses the following information, taking into account materiality:

A)

available significant amounts of cash (or cash equivalents) that, as of the reporting date, are not available for use by the organization (for example, letters of credit opened in favor of other organizations for transactions not completed at the reporting date) indicating the reasons for these restrictions;

b)

the amount of cash flows associated with maintaining the organization’s activities at the level of existing production volumes, separately from cash flows associated with expanding the scale of these activities;

V)

cash flows from current, investment and financial transactions for each reporting segment, determined in accordance with the Accounting Regulations “
Information by segments
” (PBU 12/2010), approved by order of the Ministry of Finance of the Russian Federation dated November 8, 2010 No. 143n (registered with the Ministry of Justice of the Russian Federation on December 14 .2010, RN 19171);

G)

funds in letters of credit opened in favor of the organization, along with information about the fact that the organization fulfilled its obligations under the agreement using the letter of credit as of the reporting date. If the obligations under an agreement using a letter of credit are fulfilled by an organization, but the funds of the letter of credit are not credited to its current or other account, then the reasons and amounts of non-credited funds are disclosed.

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Reflection of individual business transactions

Previously, experts pointed out that the ODDS should exclude internal movements of money between certain accounts, for example, between a ruble and a foreign currency account, between a cash register and a current account. And they recommended showing transactions for the sale/purchase of currency only in part of the resulting difference, since these transactions are associated with the transformation of one type of money into another. Now in paragraph 6 of PBU 23 it is directly stated that cash flows are not: foreign exchange transactions (except for losses or benefits from the transaction) and other similar payments to the organization and receipts to the organization that change the composition of cash or cash equivalents, but do not change them total amount.

Companies that prepare consolidated statements when preparing a general income statement should pay attention to paragraph 20 of PBU 23. It states that significant cash flows between the parent, subsidiaries and dependent organizations are reflected separately from similar cash flows between the organization and other persons. It is not possible to dwell in detail on the preparation of consolidated statements within the framework of this article.

Transit and bulk operations

As a general rule, each significant type of receipts in the capital income tax is reflected separately from cash payments, i.e., in detail (clause 15 of PBU 23).

Exceptions are provided for transit operations and mass flows, which can be reflected on a scaled-down basis, using the net method. Flows of a transit nature are those that:

• reflects the activities of the client to a greater extent than the organization itself;
• or when receipts from some persons determine corresponding payments to other persons.

Classic examples of transit payments are commission and agency, when a commission agent or agent receives funds and quickly transfers them to the owner of goods, the provider of works or services, minus his remuneration. They also include payments from counterparties to reimburse utilities or receive compensation in connection with cargo transportation.

The fact that this rule was specified in the PBU is very important. When compiling ODDS, many Russian companies showed all turnover on current accounts, taking into account funds transferred within a short time, for example, to the principal. Users of reporting, incl. Banks had a misleading impression of such flows, and they could present commission agents with some advantages in servicing.

The long-awaited clarification is provided in paragraph 16 of PBU 23 on VAT and other indirect taxes that come from buyers and customers or are paid to suppliers and contractors. Such taxes can be considered transit, since they are almost immediately sent to the budget or reimbursed from it. It follows from this that cash flows received from/transferred by these persons can be “cleared” of VAT. After all, they have virtually no effect on the net flow generated by the company for the year. Of course, the word “may” means that this choice will be recorded in the organization’s accounting policies.

Mass flows are characterized by high turnover, large amounts and a short repayment period (clause 17 of PBU 23). Examples of such income and payments include:

• mutually determined payments and receipts for settlements using bank cards;
• purchase and resale of financial investments;
• short-term (usually up to three months) refinancing.

Currency operations

Flow indicators in ODDS are reflected in rubles. The amount of cash flows in foreign currency is recalculated into rubles at the rate of the Central Bank of the Russian Federation on the date of payment or receipt (clause 18 of PBU 23).

This is a very important provision, which radically changes the rules established for the reflection of flows in foreign currency, which were previously established in paragraph 16 of the Instructions on the procedure for drawing up and presenting financial statements. According to the old rules, the entire cash flow was presented to reporting users at the exchange rate of the Central Bank of the Russian Federation as of the date of preparation of the financial statements. And in order to comply with this rule, the accountant had to generate several preliminary forms of general tax accounting for each type of foreign currency used by the organization. After this, the data for each calculation line was recalculated at the rate of the Central Bank of the Russian Federation as of December 31, and then summed up with the ODDS data on the movement of funds in Russian rubles. As a result, the reporting user was presented with a snapshot of the movement of all funds from the position of the foreign currency exchange rate as of December 31 of the corresponding reporting year. That is, for all lines of the report, along with ruble funds, movements of foreign currency funds were shown translated into rubles at the exchange rate of the Central Bank of the Russian Federation set as of December 31.

In connection with these complex recalculations, certain differences arose, which many accountants tried to attribute to the last line of the report, “The magnitude of the impact of changes in the exchange rate of foreign currency against the ruble.” And only an experienced auditor knew that this indicator represents the difference between the ruble equivalent of foreign currency funds available to the organization at the beginning of the year (at the rate at the end of the reporting year), and the equivalent of the same amount at the rate at the beginning of the reporting year, reflected in the balance sheet line 260.

Example 2

What is now said about the rules for “reversal” of foreign exchange transactions in PBU 23?

First position. We have already noted that the entire currency flow in the report is not recalculated at the rate of the Central Bank of the Russian Federation on the reporting date, but is reflected at the rate of the Central Bank of the Russian Federation on the date of payment or receipt (clause 18 of PBU 23). That is, the accountant was spared from drawing up preliminary ODDS in each foreign currency and reversing the flow at the rate of each currency as of December 31.

Second position. It was separately prescribed that the balances of cash and cash equivalents in foreign currency at the beginning and end of the reporting period are reflected in the ODDS according to the rules established by PBU 3/2006, that is, at the official exchange rate of the Central Bank of the Russian Federation as of the reporting date (clause 19 of PBU 23/2010) . That is, fund balances at the beginning of the year should no longer be recalculated at the rate at the reporting date (December 31). Therefore, in both the balance sheet and the cash flow statement, the amount of cash at the beginning and end of the year should now be the same.

Exchange differences do not affect the amount of cash flows, but they change the values ​​of balance sheet indicators at the reporting date. Therefore, exchange rate differences are not reflected in any of the sections of the ODDS, but are shown separately as the impact of changes in the foreign currency exchange rate against the ruble (line 4490). This is necessary to ensure that the opening and closing balances of cash and cash equivalents are maintained.

The difference arising in connection with the recalculation of the organization's cash flows and cash balances and cash equivalents in foreign currencies at rates on different dates is reflected in the cash flow statement separately from the organization's current, investing and financial cash flows as the impact of changes in the foreign currency exchange rate against the ruble (line 4490). In essence, these differences are exchange rate differences resulting from the recalculation of cash balances during the reporting period.

Additionally, PBU 23 establishes that in the event of a minor change in the exchange rate, conversion into rubles associated with a large number of similar transactions in such foreign currency can be carried out at the average rate calculated for a month or a shorter period (clause 16 of PBU 23). Obviously, the accounting policy needs to establish what change in the exchange rate will be considered insignificant, for what period and how the average exchange rate will be calculated.

Another important provision is the possibility of reflecting the acquisition and sale of foreign currency on the “net valuation” principle (clause 18 of PBU 23).

Recalculation may not be carried out if, within a few days after receiving a payment in foreign currency, the organization changes the amount received to rubles. Then the cash flow is reflected in the capital income tax in the amount of rubles actually received without intermediate conversion of foreign currency into rubles.

You can also do this if you have to pay in foreign currency and the exchange is made the day before. In the ODDS, you can reflect the amount of rubles actually paid without intermediate conversion of currency into rubles.

This is also an important provision, since the “unfolding” of operations in this case changed the essence of the operations. In fact, in most cases, the organization only incurred expenses for the purchase of foreign currency or income from its sale. And for those organizations that work with foreign suppliers or buyers, the ODDS was inflated due to the expansion of operations and the reversal of the currency on different dates. We recommend that you consider the innovations and write down the appropriate provisions on the rules for drawing up capital income tax in your accounting policies.

Reflection of cash flows

The organization's cash flows are reflected in the Report, subdivided into cash flows from current, investment and financial operations (clause 14 of PBU 23/2011). Moreover, each significant type of revenue is shown separately in the Report (clause 15 of PBU 23/2011). In some cases, cash flows are shown on a net basis. We are talking about the following situations (clauses 16 and 17 of PBU 23/2011): - if cash flows characterize not so much the activities of the organization as the activities of its counterparties, or when receipts from some persons determine corresponding payments to other persons. For example, indirect taxes (VAT, excise taxes), cash flows of a commission agent or agent in connection with the provision of commission or agency services (with the exception of fees for the services themselves); - if cash flows are characterized by rapid turnover, large amounts and short repayment periods. For example, making short-term financial investments using borrowed funds. Now let's consider what to do if the amount of cash flows is expressed in foreign currency. In this case, you should convert into rubles at the official exchange rate of the Central Bank of the Russian Federation on the date the payment was made or received. In the event of an insignificant change in the exchange rate, conversion into rubles associated with the performance of a large number of similar transactions in such foreign currency can be made at the average rate calculated for a month or a shorter period. If, immediately after receiving foreign currency, the organization changes it to rubles, then the cash flow in the Report is reflected in the amount of rubles actually received without intermediate recalculation. The same is done when exchanging rubles for foreign currency (clause 18 of PBU 23/2011). Balances of cash and cash equivalents in foreign currency at the beginning and end of the reporting period are shown in the Report in rubles in the amount determined in accordance with the Accounting Regulations “Accounting for assets and liabilities, the value of which is expressed in foreign currency” (PBU 3/2006 ), approved By Order of the Ministry of Finance dated November 27, 2006 N 154n. The difference arising in connection with currency conversion at rates on different dates is entered into the Report separately from the organization’s current, investment and financial cash flows as the impact of changes in the foreign currency exchange rate against the ruble (clause 19 of PBU 23/2011). Let us note that the significant cash flows of the organization between it and business companies or partnerships that are subsidiaries, dependent or main in relation to the company should be reflected separately (clause 20 of PBU 23/2011).

For your information. According to paragraph 18 of IAS 7, an enterprise must present information on cash flows from operating activities using one of the following methods: - direct method, which discloses information about the main types of gross cash receipts and payments; - the indirect method in which profit or loss is adjusted to take into account the results of non-cash transactions, any deferred or accrued past or future cash receipts or payments arising from operating activities, and items of income or expense associated with receipts or payments of cash as part of investment or financial activities. At the same time, enterprises are encouraged to use the direct method of presenting cash flows from operating activities. The fact is that only this method provides information useful for estimating future cash flows (clause 19 of IAS 7).

Don’t forget to include in your accounting policies approaches for separating cash equivalents from other financial investments, for classifying cash flows, converting them into rubles, for compressed presentation of cash flows, etc. (clause 23 PBU 23/2011).

Additional Information Disclosure

Unlike the balance sheet and profit and loss account, the new ODDS form does not have an “Explanations” column, which refers to the relevant explanations. At the same time, if an organization provides additional explanations to any ODDS indicator in reporting, then the corresponding article of the report will have to contain a link to these explanations (clause 19 of PBU 23). ODDS items should be interconnected with equivalent items in the balance sheet (clause 22 of PBU 23).

Paragraph 23 of the Accounting Regulations requires disclosure in the notes to the financial statements of the accounting policies related to the preparation of the financial statements. We are talking about setting out the principles that guide the company when separating financial investments and cash equivalents, converting the value of cash flows in foreign currency into rubles, and making a decision on a compressed presentation of cash flows of a transit or mass nature. Other explanations necessary to understand the information presented in the DSDS may also be provided.

The organization must disclose information about the possibility of additionally raising funds in the future, including (clause 24 of PBU 23):

• the amount of unused loan funds indicating the existing restrictions on their use;
• the amount of funds that can be received by the organization on overdraft terms;
• guarantees received by the organization from third parties that were not used as of the reporting date to take out a loan, indicating the amount of funds that the organization can attract;
• the amount of loans (credits) not received as of the reporting date under concluded loan agreements (credit agreements), indicating the reasons for such shortfall.

If the indicators are significant, the organization must disclose information (clause 25 of PBU 23):

• about amounts unavailable for use (for example, letters of credit opened in favor of other organizations) indicating the reasons for the restrictions;
• about cash flows associated with maintaining the organization’s activities at the level of existing production volumes, separately from cash flows associated with expanding the scale of activities;
• on current, investment and financial cash flows for each reportable segment, determined in accordance with PBU 12/2010;
• about funds in letters of credit opened in favor of the organization, along with information about the fact that the organization fulfilled its obligations under the agreement using the letter of credit as of the reporting date. If the obligations under an agreement using a letter of credit are fulfilled by an organization, but the funds of the letter of credit are not credited to its current or other account, then the reasons for non-crediting and the amount of non-credited funds are disclosed.

From the editor. In economic programs, PBU 232011 will be implemented by the reporting campaign for 2011.

ODDS structure

The cash flow statement should be submitted in the form approved.

The form contains three sections.

• Cash flows from current operations
  : receipts and payments from the company’s normal activities: sales of services and goods, rent, taxes, payments to employees, suppliers, etc.
• Cash flows from investment operations
  : purchase and sale of equipment, transport, etc., long-term financial investments.
• Cash flows from financial transactions
  : deposits of founders, receipts and payments on loans, loans, proceeds from the issue of shares, etc.