9 MONTHS FINANCIAL STATEMENTS: IMPORTANT MOMENTS

 The deadlines for preparing financial statements for 9 months of 2019 are approaching. Who, when and in what forms should file it - this will be discussed in the article. "Highlight" - innovations for small enterprises.

 A feature of financial reporting for 9 months of 2019 is that all small enterprises will have to compile and submit it. Previously, interim (quarterly) financial statements were submitted only by those small enterprises that were quarterly payers of income tax (since financial reporting in accordance with paragraph 46.2 of the TCU is an integral appendix to the income tax declaration). Now, this obligation applies to all small enterprises. All small businesses must submit financial reporting to statistics. This is due to the fact that after recent changes in Order No. 419 from the list of those enterprises that can only report once a year, small enterprises are excluded.

 Now DO NOT submit quarterly (interim) financial statements only:

1) non-profit organizations (regardless of their "size");
2) microenterprises (exception: microenterprises - quarterly payers of income tax - they must submit financial statements to tax authorities along with a profit tax declaration; they do not need to submit quarterly financial statements to statistics);
3) enterprises - joint tax payers of group 3.

 These three categories of enterprises / organizations report only once a year.

 Enterprises reporting under IFRS, regardless of which category of enterprises they belong to, are required to prepare and submit interim (quarterly) financial statements. Moreover, if enterprises that report on national standards, Order No. 419 allows only two forms of reports to be submitted as part of the interim reporting: Balance sheet and Report on financial results, then IFRS employees should submit a full set of reports as part of interim financial reporting. somewhat abbreviated form (see letters of the State Fiscal Administration of Ukraine dated August 22, 2018 No. 27209/6 / 99-99-15-02-01-15 and the Ministry of Finance dated August 23, 2018 No. 35210-07-10 / 22399).

 For IFRS-obligated - the XBRL format will become mandatory for the submission of annual financial statements starting January 1, 2020. For more information, see the website frs.gov.ua.
How to understand: are we a small enterprise or not (do we need to submit reports or not)? The criteria for dividing enterprises into micro / small / medium / large are given in part 2 of article 2 of the Law on Accounting. To classify yourself in a particular category of enterprises, it is enough to meet two of the three criteria (part 2 of article 2 of the Law on accounting).

 If an enterprise falls into three different categories according to three criteria, we choose the middle. For example, in terms of the number of employees, an enterprise is a microenterprise, in terms of assets it is small, and in terms of income it is medium (or large), in which case the enterprise will be considered small.

 In this case, the following points should be taken into account:
- which category the company belongs to, is determined according to the annual financial statements for the year preceding the reporting one;
- we change the category of an enterprise if for two consecutive years we do not meet the criteria of the corresponding category of enterprises.

 What does all this mean? The new gradation of enterprises, as defined in the Law on Accounting, was launched in 2018, and for the first time under the new rules (according to the classification from the Law on Accounting), enterprises classified themselves in 2018 according to the financial statements for 2017. Accordingly, 2018 was the first year in a certain category of enterprises. Since 2019 is the second year in a certain category, and the category should not change for two years, the company remains “in size” as the company that it classified itself in 2018 according to the financial statements for 2017. For example, if according to the results of work in 2017 you were a microenterprise, then in 2019 you remain a microenterprise. An enterprise can “relocate” to another group only in 2020.

 When determining which group an enterprise belongs to for the purpose of compiling financial statements for 2019, the indicators of the annual financial statements for 2017 are analyzed (using the average annual euro rate for 2017 - 30.0042 UAH / €).

 But if the enterprise was created only in 2018, then it determines its category according to the financial statements for 2018. At the same time, compliance with the delimiting criteria is determined using the average annual exchange rate of the euro for 2018 - 32.1429 UAH / €.

 Newly created enterprises (created in 2019) will be able to calculate what dimensional criteria they meet only at the end of the annual reporting for 2019 (part 2 of article 2 of the Law on Accounting). It turns out that newly created enterprises do not compose reports for 9 months of 2019, even if by the year they reach the “small” criteria.

 What are the forms of reporting? Enterprises that report on national standards, submit two forms of reports as part of the interim reporting: Balance sheet and Report on financial results.

  At the same time, for small enterprises, by order of the Ministry of Finance dated 05/31/2019 No. 226, the financial reporting forms were updated (amendments were made to NP (S) BU 25). Now they submit the financial statements of a small business (formerly the financial report of a small business). As before, it includes the Balance sheet (form No. 1-m) and the Report on financial results (form No. 2-m).