In this article we will discuss organizational issues related to the filing of financial statements for the 1st quarter of 2019. Who is obliged to prepare and submit interim financial reporting? What is a set of intermediate financial reporting? Features of its filing by enterprises reporting under IFRS.
Who is obliged to make up. The Law on Accounting requires enterprises, in addition to annual financial reporting, to prepare intermediate financial reporting on the results of the first quarter, first half and nine months.
But there are lucky ones who are exempted from this duty. Order No. 419 permits the non-compilation and non-submission of quarterly (intermediate) financial accountability: to non-profit organizations, to single-establishment enterprises of group 3, to small and micro enterprises.
We recall an important nuance regarding the “migration” between the categories of large / medium / small / microenterprise. To move to another category of enterprises, we must at least two years in a row not meet the criteria of the previous category.
For the first time, we classified ourselves (assigned to one or another group of enterprises) in 2018 following the results of annual financial reporting for 2017. Therefore, if, according to the annual financial reporting for 2017, we, for example, are a microenterprise, then we remain so in 2019. Even if we are no longer in the “micro” group in terms of financial reporting for 2018. And only if in terms of financial accountability for 2019 we again will not meet the criteria of “micro”, then we will leave this group after 2020.
At the same time, in relation to micro and small enterprises, it should be noted that if they are payers of income tax — highly profitable (they submit a quarterly income tax declaration), they will not get away from drawing up quarterly financial reporting. This is due to the fact that financial reporting is an integral part (annex) of the income tax declaration. The Ministry of Finance also drew attention to this in a letter No. 11130-02-2 / 4779 dated February 21, 2017.
Newly created enterprises to determine their group apply indicators at the date of the first annual financial statements. So says h. 2 Article. 2 of the Law on Accounting. It turns out that the interim financial statements for 2019 are not submitted to the newly created enterprise, since they can only determine whether they belong to a specific category based on the results of the first annual financial statements. Again, the income tax for newcomers also does not report “inside” the year.
Quarterly financial reporting should be submitted: to the statistical bodies — no later than the 25th day of the month following the reporting quarter (no later than April 25, 2019; July 25, 2019; October 25, 2019); tax authorities – together with the quarterly income tax declaration, i.e., within 40 calendar days following the last day of the reporting quarter (no later than May 10, 2019; August 9, 2019; November 11, 2019).
If you submit reports electronically, then it is submitted through the “Single window of electronic reporting” immediately to the statistics and to the tax authorities.
The only thing to note is that if you are a micro or small enterprise – a profit tax payer – a high-income employee (that is, you must file along with a quarterly income tax and financial reporting report), then you do not have to submit interim reporting to statistics. Therefore, when filing quarterly financial statements, you are guided by the deadlines for filing a quarterly income tax declaration.
A set of financial statements. It differs from the enterprises that make up the reporting under P (C) of the accounting unit, and those enterprises that make up the reporting under IFRS. The enterprises reporting under P (C) of a CU are allowed to submit interim financial reporting only in two forms: Balance (Statement of Financial Position) and Report on Financial Results (Statement of Comprehensive Income). It is important to choose for yourself (depending on who you are: “micro, small or medium / large”) the correct forms of financial reporting. This is so that later there would be no questions about the adoption / non-adoption of the same income tax declaration. But the enterprises that prepare statements under IFRS, as part of the interim reporting, must submit all forms of financial reporting. The SFSU and the Ministry of Finance paid attention to this. After all, two forms of reporting as part of interim reporting Procedure No. 419 permits to submit only to enterprises that compose financial reporting on an NP (S) BU.
Strictly speaking, this also corresponds to the requirements of IFRS. According to § 4 of IAS 34, interim financial reporting is financial reporting, which consists of either a complete set of financial reporting (as defined in IAS 1) or a set of brief financial reporting for the interim period. At the same time, a set of short intermediate financial statements should include at least the following components:
1) a brief report on the financial condition;
2) a summary report or summary of profit or loss or other comprehensive income;
3) a brief report on changes in equity;
4) a summary of cash flow;
5) some explanatory notes.
That is, IFRS require submission as part of interim financial reporting of all reporting forms, albeit in abbreviated form.
Special attention should be paid to the “completeness” of financial reporting for those enterprises whose reporting for 2019 is the first IFRS reporting (i.e. for which the date of transition to IFRS is 01/01/2018). It should be noted that according to IFRS 1 “First application of IFRS” the requirements of this standard apply not only to annual financial statements, but also to each interim report (if such report is prepared) for a part of the period covered by the first financial reporting prepared under IFRS. In other words, interim financial reporting for 2019 (i.e. reporting for 1 quarter, half year and 9 months of 2019) should also be prepared taking into account the requirements of IFRS 1.
And this means that we must provide comparative information under IFRS for reporting for the 1st quarter of 2019 (half year, 9 months), transformed under IFRS. That is, financial reporting for the 1st quarter of 2019 for enterprises for which the first reporting period under IFRS is 2019, should include:
– Statement of financial position (Balance sheet) as of March 31, 2019 (prepared under IFRS) + comparative information to it – Balance sheet as of January 1, 2018 + Balance sheet as of December 31, 2018, transformed under IFRS;
– Report on profit and loss and other comprehensive income – for the 1st quarter of 2019 + comparative information to it – Report on financial results for the 1st quarter of 2018, transformed according to IFRS;
– Cash flow statement and Equity report for the 1st quarter of 2019 + comparative information for these reports – the same reports for the 1st quarter of 2018, transformed according to IFRS;
– notes to financial statements. At the same time, according to the requirements of IFRS 1 (§ 32), the notes that are submitted to the interim financial reporting of the first reporting period under IFRS must contain the reconciliation of indicators according to P (C) BU and IFRS (coordination of equity and total aggregate profit) for the corresponding comparative period for 2018
IFRS-specific reporting submission. The Accounting Act prescribes IFRS-obligated enterprises, starting from reporting for 2019, to submit financial statements in a single electronic format defined by the Ministry of Finance, based on the taxonomy of financial reporting according to international standards. Formally, this requirement applies to the reporting for the 1st quarter of 2019. Reporting should be submitted to the Financial Report Collection Center, which is managed by the National Securities and Stock Market Commission. But so far, for technical reasons, the submission of taxonomy reporting in a single electronic format is postponed. Therefore, while IFRS-obliged enterprises have no choice, how to report “as before” using national reporting forms. Although the NKTSBFR in its letter dated 07.02.2019 No. 16/3318-P indicated that financial reporting already for the 1st quarter of 2019 should be submitted by taxonomy. Recall that the Ministry of Finance, National Financial Services Commission and the National Commission on Securities and Stock Market approved the taxonomy of UA XBRL IFRS. It is published (in the form of a list of files) on the website of the Ministry of Finance and the websites of regulators: National Financial Services Commission and the National Securities and Stock Market Commission.