Management report

This is a new Report, which for the first time needs to be submitted together with financial reporting for 2018. Management report is a document containing financial and non-financial information that describes the state and development prospects of the enterprise and discloses the main risks and uncertainties of its activities.

The category of micro and small enterprises does not submit a management report, while medium and large enterprises need to submit a report, and non-financial information can be given as an average.

The company develops the form of the management report independently (no form). But there is the Methodology Recommendation of the Ministry of Finance for the preparation of this Report (approved by order of the Ministry of Finance dated December 7, 2018 No. 982).

The Report is submitted along with annual financial reporting, and, as provided for by Part 7 of Art. 11 of the Law on Accounting, is filed in the manner and deadlines set for annual reporting. That is, it should be formally submitted to the same users who receive financial reporting, and at the same time.

But! It should be noted that there is no electronic form for this Report. It is neither in the list of tax forms, nor in the list of statistical reporting forms that can be submitted in electronic form. It is not possible to submit the Management Report in electronic form.

At the same time, the tax authorities do not need this Report by and large. And it is important to take into account that this Report itself is not a component of the financial statements. And since this is not financial reporting, it means that it is not an annex to the tax return. Accordingly, there will be no problems with the adoption of the income tax declaration due to the fact that the Management Report will not be submitted to the tax authorities.

As for statistics, this report should be formally submitted to the statistics. But again, there is no electronic form for this Report, and it is not in the list of statistical forms of reports either. Therefore, in principle, it should be submitted to the statistics, if it requires it.

But there is an important point for those enterprises, whose financial reporting for 2018 is to be made public, orders that not only financial reporting, but also the Management Report should be made public on such companies on the website. At the same time, as we noted above, a substantial administrative fine is provided for violating the procedure for disclosing financial statements. The question here is: can it be considered a violation of the procedure for publicity of publication of its publication without a Management Report? There is reason to believe that yes. Therefore, for enterprises that are obliged to publish financial reporting for 2018, it is better not to take risks and publish the Management Report together with annual financial reporting on its official website.