ВПРОВАДЖЕННЯ МЕТОДУ НАРАХУВАННЯ В ДЕРЖАВНОМУ СЕКТОРІ: ОБЛІК ФІНАНСОВИХ АКТИВІВ ЗА МСБОДС 41

Abstract

The article is devoted to considering the accounting treatment for financial investments of state and local budgets based on the accrual method of accounting. The transition from the cash basis to accrual accounting in the public sector is stipulated by increasing demand for relevant, faithful, and verifiable information about the financial position and performance of a budget. The Strategy for Reforming the Public Finance Management System for 2017–2020 and the Strategy for Modernization of Accounting and Financial Reporting System in the Public Sector for the Period up to 2025 proclaim the adoption of the International Public Sector Accounting Standards in Ukrainian public sector accounting. The authors consider budgetary investments in securities as financial investments that, with the purpose of accounting, are classified as financial assets. According to Ukrainian legal requirements, financial assets of the state and local budgets are accounted under the cash basis of accounting. The research compares the International Public Sector Accounting Standard 41 and the National Public Sector Accounting Standard 134, disclosing the differences between the cash basis and accrual accounting in recognizing and measuring the financial assets. The transition to full accrual accounting in the public sector of Ukraine contemplates applying accounting estimates of financial assets indicated in the International Public Sector Accounting Standard 41: amortized cost, fair value through net assets, and fair value through surplus or deficit. The research results in developing the accounting treatment for financial investments of the budgets using the accrual accounting in accordance with the IPSAS requirements. The developed approach encompasses procedures of the initial recognition, estimation of transaction costs, amortization of discount and premium, accrual of interest revenue, remeasurement of fair value, recognition of impairment, and preparation of reserves to cover expected credit losses. Implementing the suggested accounting procedures will be useful for local authorities’ departments of finances.