Abstract
The paper deals with review of Russian accounting reform, which took place during 19922014 years. This reform showed that Russia has not just copied IFRS but it has chosen the way of reasonable and prudent their application. The essence of this approach is following: convergence with IFRS and RAS (Russian accounting standards): the financial statements are drawn up in accordance with RAS which in turn are developed under IFRS; introducing a mandatory requirement of drawing up consolidated statement under IFRS, as well as its mandatory audit and publication: consolidated financial statements of public companies are formed under IFRS.This paper reviews real applications IFRS in Russia: de-jure and the defacto. It is drawn conclusion that influence of IFRS methodology affected to accounting and, as a consequence, on its analysis. We have concluded that the main changes in national standards consist in appearance of professional judgment and economic interpretation of economic life facts. The article also presents and analyzes challenges in the application of the concept of professional judgment in Russia. Particularly, dynamic study of methodology of accounting education in Russia in 2004-2015 shows that limitations in the application of IFRS in Russia related to the national peculiarities of application of professional judgment and specific approach in the interpretation of the facts of economic life.In the paper also shows influence of IFRS adoption in Russia on conceptual framework of financial reporting: assets, liabilities, capital, income, expenses, and others.
Highlights
The economic crisis of the early twentyfirst century showed that financial reporting should serve the function of providing users with financial information, useful for management decisions
The essence of this approach is following: convergence with International Financial Reporting Standards (IFRS) and RAS (Russian accounting standards): the financial statements are drawn up in accordance with RAS which in turn are developed under IFRS; introducing a mandatory requirement of drawing up consolidated statement under IFRS, as well as its mandatory audit and publication: consolidated financial statements of public companies are formed under IFRS.This paper reviews real applications IFRS in Russia: de-jure and the defacto
Professional opinion is objective because it is based on an analysis of historical fact of economic life; professional opinion is subjective, since it is an opinion based on knowledge, skills and experience of a particular specialist; the "criterion of correctness" of professional judgments is the fair financial reporting; "guarantee of correctness" of professional judgments is audit of financial statement; professional judgment is not static as new information appears all the time; professional judgment needs to be regulated at the regulatory level as the boundary between the judgments and hiding, and even fraud is blurred as mentioned in research by Generalova (2005) and Sokolova (2012)
Summary
The economic crisis of the early twentyfirst century showed that financial reporting should serve the function of providing users with financial information, useful for management decisions. Otherwise, it is inefficient and, in some cases even destructive - benefits from its use does not cover its costs. Key information problems of financial reporting arise from the methodology of accounting: a low transparency due to incomplete requirements of the presentation and disclosure of information, a lack of comparability of financial statements prepared in accordance with national standards; not fully reflection of all economic life facts The course of solving these and other problems was set by worldwide accounting community long time ago while Russia joined it only in the late 90s when they intended carrying out reforms in accounting
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