International financial reporting standards came to us in 2012, but today the question of how to draw up financial statements in accordance with IFRS constantly arises in organizations. In this regard, we will help you understand the basics of standardization, draw up consolidated statements using the example of an industrial enterprise and present its differences from the usual accounting statements.

IFRS: SCOPE AND COMPOSITION

International standards have been developed since 1973 in order to create uniform principles of accounting and reporting in different countries. International standards came to Russia in full only in 2012 with the adoption of the Order of the Ministry of Finance of Russia dated November 25, 2011 No. 160n "On the implementation of International Financial Reporting Standards and Interpretations of International Financial Reporting Standards in the Russian Federation."

The main difference between Russian accounting standards (RAS) and international ones is that IFRS is not a set of requirements and laws, but recommendation prescriptions with a number of requirements for the structure of financial statements.

An important point: the application of IFRS does not override RAS.

According to paragraph 2 of Art. 3 of the Federal Law of 27.07.2010 No. 208-FZ (as amended on 03.07.2016) "On Consolidated Financial Statements" (hereinafter - Federal Law No. 208-FZ) the consolidated financial statements of the organization are prepared along with the accounting(financial)the reporting of this organization, drawn up in accordance with the Federal Lawdated 06.12.2011 No. 402-FZ(as amended by from 23.05.2016) « About accounting».

Often, specialists of organizations have difficulties in distinguishing between IFRS / IAS and IFRS / IFRS (International Accounting Standards) and IFRS / IFRS (International Financial Reporting Standards). Until 2001, the standards were called IAS, and after 01.04.2001 the name IFRS appeared, so both standards are united under the concept of "IFRS".

Sometimes accountants, for simplicity of perception, are called IAS standards for accounting, and IFRS - standards for the preparation of financial statements.

Who should apply IFRS in the Russian Federation

Federal Law No. 208-FZ disclosed scope of international standards,which applies to:

• credit organizations;
• insurance organizations (with the exception of medical insurance organizations operating exclusively in the field of compulsory medical insurance);
• non-state pension funds;
• management companies of investment funds, mutual funds and non-state pension funds;
• clearing organizations;
• federal state unitary enterprises, the list of which is approved by the Government of the Russian Federation;
• joint stock companies, the shares of which are in federal ownership and the list of which is approved by the Government of the Russian Federation;
• other organizations whose securities are admitted to organized trading by including them in the quotation list.

IFRS documents consist of:

• International Financial Reporting Standards (IFRS);
• International Financial Reporting Standards (IAS);
• clarifications prepared by the International Financial Reporting Interpretations Committee (IFRIC);
• clarifications prepared by the former Standing Committee on Clarifications (RPC).

Composition of International Financial Reporting Standards (IFRS)

IFRS (IFRS) 1 « First-time adoption of International Financial Reporting Standards»

The objective of the standard is to ensure that an entity's first IFRS financial statements and interim financial statements for the portion of the period covered by those financial statements contain high quality information that:

• is transparent for users and comparable for all periods presented;
• represents a necessary starting point for accounting in accordance with International Financial Reporting Standards;
• can be prepared at a cost that does not exceed its benefits.

First IFRS financial statements for an organization, it is the first annual financial statements, for the preparation of which the organization adopts International Financial Reporting Standards and confirms this by including in these financial statements an explicit and unambiguous statement of its compliance with IFRS.

The organization should prepare and submit opening report on the financial position under IFRS as of the date of transition to IFRS, thus creating a starting point for accounting in accordance with International Financial Reporting Standards.

IFRS (IFRS) 2 « Share-based payouts»

The purpose of the standard is to establish the procedure for preparing financial statements for an entity that carries out share-based payment transactions. The standard requires an entity to recognize in profit or loss and in the statement of financial position the impact of share-based payment transactions, including costs associated with transactions in which share options are granted to employees.

IFRS (IFRS) 3 « Business combinations»

Business combination- a transaction or other event in which the acquirer obtains control over one or more businesses. Transactions that are sometimes referred to as "true mergers" or "peer mergers" are also business combinations.

The objective of this standard is to improve the relevance, reliability and comparability of information about a business combination and its consequences that the reporting entity presents in its financial statements. To achieve this goal, IFRS 3 sets out principles and requirements for how an acquirer:

• recognizes and measures in its financial statements the identifiable assets acquired, liabilities incurred and any non-controlling interest in the acquiree;
• recognizes and measures goodwill (an asset representing future economic benefits arising from other assets acquired in a business combination that are not identified or separately recognized) acquired in a business combination or a bargain purchase gain;
• determines which disclosures to enable users of financial statements to evaluate the nature and financial consequences of the business combination.

IFRS (IFRS) 4 « Insurance contracts»

The purpose of the standard is to establish the procedure for the reflection of insurance contracts in the financial statements of an organization that enters into such contracts as an insurer (a party obliged under an insurance contract to pay compensation in the event of an insured event), which will remain in effect until the board finishes the second phase of its project under insurance contracts. In particular, the standard requires:

• limited improvements to insurers' accounting for insurance contracts;
• disclosures that identify and explain the amounts reported in the financial statements of an insurer in relation to insurance contracts and help users of those financial statements understand the amount, timing and uncertainty of future cash flows from insurance contracts.

IFRS) 5 « Non-current assets held for sale and discontinued operations»

The objective of this Standard is to prescribe the accounting for assets held for sale and the presentation and disclosure of discontinued operations. In particular, the standard requires:

• measure assets held for sale at the lower of two values: carrying amount and fair value less costs to sell, and stop depreciation of such assets;
• present assets held for sale separately in the statement of financial position and the results of discontinued operations separately in the statement of comprehensive income.

Discontinued activity Is a component of an entity that is either retired or classified as held for sale and represents a separate major line of business or geographic area in which the business takes place.

IFRS (IFRS) 6 « Exploration and evaluation of mineral reserves»

The objective of IFRS 6 is to define the accounting for exploration and evaluation activities in the financial statements. In particular, the standard requires:

• limited improvements to existing practical approaches to accounting for exploration and appraisal costs;
• from entities that recognize exploration and evaluation assets, testing such assets for impairment in accordance with this IFRS and assessing any impairment in accordance with IAS 36 Impairment of Assets;
• disclosures that identify and clarify the amounts of the entity's financial statements that relate to exploration and evaluation activities and help users of those financial statements understand the amount, timing and certainty of future cash flows from any exploration and evaluation assets recognized ...

IFRS (IFRS) 7 « Financial Instruments: Disclosures»

The objective of the standard is to establish requirements for organizations to disclose information in their financial statements that allows users to evaluate:

• the impact of financial instruments on the financial position and financial performance of the organization;
• The nature and extent of the risks to which the entity is exposed during the period and at the end of the reporting period in connection with financial instruments, and how the entity manages these risks.

IFRS (IFRS) 8 « Operating segments»

An entity shall disclose information that enables users of its financial statements to evaluate the nature and financial consequences of the entity's activities and the economic environment in which it operates.

IFRS (IFRS) 10 « Consolidated financial statements»

The objective of this Standard is to define the principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities.

IFRS (IFRS) 11 « A jointentrepreneurship»

The purpose of this standard is to establish principles for the preparation and presentation of financial statements of organizations involved in business activities that are controlled jointly (that is, in joint ventures).

IFRS (IFRS) 12 « Disclosure of information about participation in other organizations»

The objective of this ISA is to establish a disclosure requirement for an entity that enables users of its financial statements to evaluate:

• the nature of its participation in other organizations and the associated risks;
• the effect of such participation on its financial position, financial performance and cash flows.

IFRS (IFRS) 13 « Fair value measurement»

fair value- a valuation based on market data, not an organization-specific valuation. For some assets and liabilities, observable market transactions or market information may exist. There are no market transactions or market information for other assets and liabilities. However, the objective of measuring fair value in both cases is the same - to determine the price at which an orderly transaction would take place between market participants to sell an asset or transfer a liability at the measurement date under current market conditions.

Composition of International Financial Reporting Standards (IAS)

IFRS (IAS) 1 « Presentation of financial statements»

This HKSA establishes a general purpose financial reporting framework to ensure that the financial statements of an entity are comparable with those of prior periods and with the financial statements of other entities. This Standard specifies the general requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

A complete set of financial statements includes:

• a statement of financial position as at the end of the period;
• statement of profit or loss and other comprehensive income for the period;
• statement of changes in equity for the period;
• cash flow statement for the period;
• notes consisting of a summary of significant accounting policies and other explanatory information;
• comparative information for the previous period;
• statement of financial position at the beginning of the previous period, if the entity applies any accounting policy statement retrospectively, retrospectively restates items in its financial statements, reclassifies items in its financial statements.

An organization may use names other than those in this International Standard for these reports. For example, the title "Statement of Comprehensive Income" may be used instead of the title "Statement of Profit or Loss and Other Comprehensive Income".

IFRS (IAS) 2 « Stocks»

The purpose of the standard is to define the accounting treatment for inventories. The main issue in accounting for inventories is to determine the amount of costs that is recognized as an asset and carried forward until the corresponding revenue is recognized.

The standard provides guidance on the determination of cost and its subsequent recognition as an expense, including any write-down to net realizable value. It also provides guidance on the costing formulas that are used to allocate costs to inventory.

In accordance with IAS 2, inventories are measured at the lower of cost or net realizable value, excluding costs to sell.

FOR YOUR INFORMATION

In the Regulation on accounting "Accounting for inventories" (PBU 5/01), approved by Order of the Ministry of Finance of Russia dated 09.06.2001 No. 44n (as amended on 16.05.2016), there is no such method.

IFRS (IAS) 7 « Cash flow statement»

The objective of this Standard is to require the provision of information about historical changes in an entity's cash and cash equivalents in the form of a statement of cash flows, in which cash flows for a period are classified as flows from operating, investing and financing activities.

IFRS (IAS) 8 « Accounting Policies, Changes in Accounting Estimates and Errors»

The objective of this standard is to establish criteria for selection and changes in accounting policies, together with accounting procedures and disclosures about changes in accounting policies, changes in accounting estimates and corrections of errors.

The standard is intended to improve the relevance and reliability of the information contained in the financial statements of an organization, as well as the comparability of these financial statements over time and with the financial statements of other organizations.

IFRS (IAS) 10 « Events after the reporting period»

The purpose of the standard is to identify when an entity should adjust its financial statements for events after the reporting period.

The standard contains requirements for the information that an entity must disclose regarding the date the financial statements were authorized for issue and events after the reporting date.

Events after the reporting date are those events that occur between the reporting date when the financial statements are approved.

IFRS (IAS) 11 « Construction contracts»

The objective of this Standard is to prescribe the accounting for revenue and costs associated with construction contracts. Due to the nature of the activities carried out under construction contracts, the date of commencement of such activities and the date of their completion, as a rule, fall in different accounting periods. Thus, the main task of accounting for construction contracts is to distribute the proceeds and costs associated with the contract for the reporting periods in which construction work is carried out.

IFRS (IAS) 12 « Income taxes»

The objective of this standard is to prescribe the accounting for income taxes. The main issue in accounting for income taxes is how to account for current and future tax consequences:

• future reimbursement (repayment) of the carrying amount of assets (liabilities) that are recognized in the statement of financial position of the organization;
• transactions and other events of the current period recognized in the financial statements of the entity.

IFRS (IAS) 16 « Fixed assets»

The objective of the standard is to define the accounting treatment for property, plant and equipment so that users of the financial statements can obtain information about an entity's investments in property, plant and equipment and changes in those investments.

The main questions in accounting for fixed assets:

• asset recognition;
• determination of the book value of assets;
• depreciation;
• impairment losses.

Fixed assets Are tangible assets that:

• meet the asset recognition requirements;
• intended for use in production, performance of work, provision of services, for rent, for administrative purposes;
• intended to be used for more than one period.

IFRS (IAS) 17 « Rentals»

The objective of this Standard is to determine appropriate accounting policies and disclosures for leases for lessees and lessors.

IFRS (IAS) 18 « Revenue»

The objective of the standard is to determine the accounting treatment for revenue arising from certain types of transactions and events.

The main question when recording revenue- determine the moment when it needs to be recognized. Revenue is recognized when it is probable that future economic benefits will flow to the entity and the benefits can be measured reliably. This Standard specifies the conditions under which these criteria will be met and, therefore, revenue will be recognized. This International Standard also provides practical guidance on the application of these criteria.

According to RAS, income can be shown only in the event of a transfer of ownership of goods, for IFRS this is not a determining factor. As for costs, for IFRS, unlike RAS, it is not necessary to document costs.

IFRS (IAS) 19 « Employee benefits»

This Standard specifies how an entity should account for and disclose employee benefits. The purpose of the standard is to establish such rules. IAS 19 requires an entity to recognize:

• a liability when an employee rendered a service in exchange for a future consideration;
• an expense when an entity utilizes an economic benefit arising from the provision of a service by an employee in exchange for a fee.

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

This standard should be applied in the accounting and disclosure of information about government grants and other forms of government assistance. Under IAS 20, government grants include government assistance in the form of transfers of resources to certain companies in exchange for past or future compliance with the conditions associated with the grant.

FOR YOUR INFORMATION

The analogue of IAS 20 in Russian legislation is the Accounting Regulations “Accounting for State Aid” (PBU 13/2000), approved by Order of the Ministry of Finance of Russia dated October 16, 2000 No. 91n.

IFRS (IAS) 21 « Impact of changes in exchange rates»

An organization can carry out foreign exchange transactions in two ways: to conclude transactions denominated in foreign currencies, or to own foreign divisions. In addition, an entity may present its financial statements in foreign currency.

The objective of this Standard is to determine how foreign currency transactions and foreign operations are reflected in an entity's financial statements and how the financial statements are translated into the presentation currency.

IFRS (IAS) 23 « Borrowing costsm»

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are included in the cost of that asset. Other borrowing costs are recognized as an expense.

IFRS (IAS) 24 « Related Party Disclosures»

The objective of the standard is to provide the disclosure in the financial statements of the information necessary to draw attention to the possibility that the existence of related parties, as well as transactions and balances of transactions, including contractual commitments for future transactions with such parties, can affect the financial position, profit or loss of the organization. ...

IFRS (IAS) 27 « Separate financial statements»

The objective of this Standard is to prescribe the accounting and disclosure rules for investments in subsidiaries, joint ventures and associates when an entity prepares its separate financial statements.

IFRS (IAS) 28 « Investments in associates and joint ventures»

The objective of this standard is to define the accounting treatment for investments in associates and the requirements for the application of the equity method when accounting for investments in associates and joint ventures.

An associate is an entity over which the investor has significant influence and which is neither a subsidiary nor an interest in joint ventures.

IFRS (IAS) 29 « Financial reporting in a hyperinflationary economy»

In a hyperinflationary economy, presenting an organization's results of operations and financial position in local currency without translation is not useful. Money loses purchasing power at such a rate that it is misleading to compare amounts from transactions and other events that occurred at different times, even within the same reporting period.

IFRS (IAS) 32 « Financial Instruments: Presentation»

The objective of the standard is to establish the principles according to which financial instruments are presented as liabilities or equity, and also offset financial assets and financial liabilities.

The standard is aimed at a deeper understanding by users of financial statements of the importance of financial instruments for the financial position, results of operations and cash flows of an organization.

A financial instrument is any contract that simultaneously gives rise to a financial asset in one entity and a financial liability or equity instrument to another.

IFRS (IAS) 33 « Earnings per share»

The objective of this Standard is to establish principles for the determination and presentation of earnings per share information to facilitate comparison of the performance of different entities for the same reporting period or of the same entity for different reporting periods.

IFRS (IAS) 34 « Interim financial reporting»

The purpose of the standard is to define the minimum content of an interim financial report and establish the recognition and measurement principles in full or condensed financial statements for an interim period.

IFRS (IAS) 36 « Impairment of assets»

The objective of this Standard is to determine the procedures that an entity should apply when accounting for assets so that their carrying amount does not exceed their recoverable amount.

IFRS (IAS) 37 « Estimated liabilities, contingent liabilities and contingent assets»

The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets, and sufficient information is disclosed in the notes to the financial statements to enable users to understand their nature, timing and amount.

IFRS (IAS) 38 « Intangible assets»

This Standard requires an entity to recognize an intangible asset only when certain criteria are met. The standard also prescribes how the carrying amount of intangible assets is measured and requires certain disclosures about intangible assets.

IAS 39 Financial Instruments: Recognition and Measurement

The objective of this standard is to establish principles for the recognition and measurement of financial assets, financial liabilities and certain contracts to buy or sell non-financial items.

The standard defines such a concept as hedged item that is either an asset or a liability or firm commitment that gives the entity an exposure to changes in fair value or future cash flows. Hedging financial instruments consists in partial or full compensation of changes in fair value or cash flows of hedged (protected) items of financial instruments.

IFRS (IAS) 40 « Investment property»

The objective of the standard is to establish the accounting treatment for investment property and the related disclosure requirements.

This Standard shall be applied by entities to all types of financial instruments in the recognition, measurement and disclosure of investment property.

Investment real estate is property (land or building) that is at the disposal of the owner or lessee under a finance lease for the purpose of receiving rental payments, capital gains, but not for use in the production or supply of goods or services, or for administrative purposes, as well as for sale in the normal course of business.

IFRS (IAS) 41 « Agriculture»

The purpose of the standard is to establish the accounting procedure, financial reporting and disclosure requirements for agricultural activities.

PREPARATION OF CONSOLIDATED STATEMENTS

In accordance with Federal Law No. 208-FZ, consolidated financial statements are understood as systematized information reflecting the financial position, financial performance and changes in the financial position of an organization.

Let us consider an example of drawing up and analyzing consolidated financial statements in accordance with IFRS using the example of the company Alpha JSC, which controls the activities of two enterprises - Beta JSC and Gamma JSC, engaged in the production and maintenance of units and spare parts for cars.

The statement of profit or loss and other comprehensive income (statement of comprehensive income) (Table 1) is similar to the statement of financial results (Form No. 2) of RAS accounting statements.

Table 1. Consolidated statement of comprehensive income for 2015 and 2016, thousand rubles.
Index	2016 g.	2015	2016 to 2015
			thousand roubles.
Cost of sales
Gross profit
Selling, general and administrative expenses
Provision for impairment of property, plant and equipment, goodwill and intangible assets
Other operating income / expenses, net
Operating profit
Finance income / expenses, net
Positive / negative exchange rate differences
Profit before tax
Income tax
Profit for the reporting period

In addition to this type of consolidated report, you can provide more detailed information on some items, for example, on sales proceeds (Table 2).

Table 2. Analysis of revenue for 2015 and 2016, thousand rubles.
Index	2016 g.	2015	2016 to 2015
			thousand roubles.
Revenue
Unit repair
Beta JSC
JSC "Gamma"
Maintenance
Beta JSC
JSC "Gamma"
Beta JSC
JSC "Gamma"

From the presented analysis it can be seen that for all the considered types of activity, enterprises have observed an increase in revenue, with the exception of JSC "Gamma" in terms of the repair of automobile units. This decline was due to the fact that the percentage of readiness of one agreement of JSC Gamma, the main revenue was recognized in the reporting of 2015.

The statement of financial position is very similar to the RAS balance sheet. According to regulatory data the statement of financial position under IFRS should include line items representing the following amounts:

• fixed assets;
• investment property;
• intangible assets;
• financial assets;
• investments accounted for using the equity method;
• biological assets;
• stocks;
• trade and other receivables;
• cash and cash equivalents;
• the total amount of assets classified as held for sale and assets included in disposal groups classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations;
• trade and other payables;
• estimated liabilities;
• financial commitments;
• current tax liabilities and assets as defined in IAS 12 Income Taxes;
• deferred tax liabilities and deferred tax assets as defined in IAS 12;
• liabilities included in disposal groups classified as held for sale in accordance with IFRS 5;
• non-controlling interests presented in equity;
• issued capital and reserves attributable to owners of the parent.

The organization should represent additional line items, headings and subtotals in the statement of financial position when such a presentation is relevant to understanding its financial condition.

Let's consider an example of drawing up a report on the financial position of JSC "Alpha" (Table 3).

Table 3. Statement of financial position, thous. Rub.
Index	2016 g.	2015	The change
			thousand roubles.
Assets, total
Fixed assets
Intangible assets
Receivables
Advances issued
Other assets and investments in other organizations
Accounts receivable for taxes and fees
Cash and short-term deposits
Deferred tax assets
Equity, total
Authorized capital
Extra capital
Undestributed profits
Obligations, total
Loans
Finance lease liabilities, pension plans
Deferred tax liabilities and other provisions
Accounts payable
Advances received
Debt on taxes and duties

NOTE

The form of the balance sheet in accordance with RAS is clearly spelled out in the Order of the Ministry of Finance of Russia dated 02.07.2010 No. 66n (as amended on 06.04.2015) "On the forms of financial statements of organizations", while the form of the statement of financial position according to IFRS is absent (there is only a number of rules and articles to be displayed in the report).

The amount of assets (293,491 thousand rubles) should be equal to the sum of liabilities (equity + liabilities = 293,491 thousand rubles) similar to the drawing up of the balance sheet.

At the stage of drawing up consolidated financial statements, it is customary to calculate EBITDA(profit before deduction of expenses on payment of interest, taxes and accrued depreciation) (tab. 4).

Table 4. Calculation of EBITDA, thousand rubles.
Index	2016 g.	2015	2016 to 2015,%
Unit repair
Beta JSC
JSC "Gamma"
Maintenance
Beta JSC
JSC "Gamma"
Beta JSC
JSC "Gamma"
Total EBITDA

This indicator has recently become especially popular with investors and lenders. Such an indicator can be calculated only if the company keeps records in accordance with IFRS standards. Our standards do not provide for the calculation of this indicator, but nevertheless, the calculation formula for the Russian practice has been slightly adapted, and EBITDA in this case will be equal to the sum of profit from sales and depreciation deductions.

Calculation is also important. debt to EBITDA ratio (Code), which reflects the company's ability to meet its obligations, characterizing its solvency:

K od = Liabilities / EBITDA.

K od 2015 = 220 794 thousand rubles. / 69 145 thousand rubles. = 3.19;

K od 2016 = 157 435 thousand rubles. / 54 352 thousand rubles. = 2.90.

The higher this indicator, the more problems the company has with debt obligations and the less opportunity it has to repay these obligations at the expense of its own profit.

INSTEAD OF CONCLUSION

Having considered the features of drawing up consolidated financial statements, it is worth noting the similarities with Russian accounting statements. In the example considered, the company "Alpha" controls the activities of several enterprises, which form their individual reporting. Further, she prepares consolidated statements, combining the data of the enterprises under her jurisdiction. At the same time, the accounting policies of all enterprises should be similar in basic matters.

Most often, in practice, the so-called management companies release their own version of the accounting policy to their subordinate enterprises, on the basis of which the subsidiaries must correct their own version.

A. N. Dubonosova, Deputy Managing Director for Economics and Finance

Arsenal OJSC (example)

as of 01.01.2013

The purpose of the analysis of financial statements compiled in accordance with IFRS is to obtain key characteristics of the financial condition and financial results of the company in order to form an adequate assessment of the achieved level of business efficiency, identify and quantify the impact of external and internal factors, as well as justify current and strategic business plans ...

1. REPORTING. The general assessment of the financial position of the enterprise is made using a system of special coefficients. Most of the financial ratios are calculated according to the data of two main forms of reporting - the balance sheet and the income statement

Company balance

Article title	01.01.2013			01.01.2012
ASSETS - ASSETS
Current assets (current assets) - Current assets
Cash and cash equivalents - Cash assets		368828			104238
Short-term investments - Marketable Securities		8231			152612
Accounts receivable - Accounts Receivable	426937			340691
Doubtful debt adjustment - Provision / allowance for bad / doubtful debts	0			0
		426937			340691
Stocks - Inventories / Stocks Raw materials and materials - Raw Materials	152197			138649
Unfinished production - Work-in-process	355126			323513
Goods fit for sale - Goods available for sale	0			0
Finished products - Finished goods	507323			462162
Selling expenses - Selling expenses	0			0
		1014646			924324
Prepaid expenses - Prepaid Expenses		14580			7219
			1833222			1529084
Non-current (non-current) assets - Non-current assets
Long-term investment - Long-term investments		355593			148001
Fixed assets - Property, plant & equipment	893354			880194
Accrued depreciation - Depreciation	607168			565603
		286186			314591
Intangible assets - Intangible Assets	63939			5877
Accrued depreciation - Depreciation	58863			0
		5076			5877
Deferred tax assets - Deferred tax assets		11323			29078
Other debtors - Other debtors		0			0
			658178			497547
			2491400			2026631
LIABILITIES - LIABILITIES
Current responsibility - Current Liabilities
Accrued liabilities - Accrued Liabilities
Accounts and bills payable - Accounts & notes payable		907014			349607
Wage arrears - Wages and salaries payable	0			321706
Tax debt - Taxes payable	0			138300
Debt on dividends - Dividend payable	6254			5371
Estimated reserves - Provisions		56550			28682
		62804			494059
Revenue of the future periods - Defended (unearned) revenues		2289			1692
Current portion of long-term debt - Current portion of Long-term debt		0			289370
			972107			1134728
Long term duties - Long-term liabilities
Long-term loans - Long-term debt		0			0
Deferred tax liabilities - Deferred tax liabilities		20933			20170
			20933			20170
			993040			1154898
OWN CAPITAL - OWNERS 'EQUITY
Invested capital - Contributed capital		48156			46754
Accumulated retained net income - Retained earnings		839853			242903
Other accumulated comprehensive income - Other accumulated comprehensive income		610351			582076
			1498360			871733
			2491400			2026631

Profit statement based on cost classification by function

Index	for 2012		for 2011
Revenues from sales - Net sales		8207745		6263775
Cost of sold products (works, services) - Cost of sales	3392146		2667088
Gross profit - Gross margin		4815599		3596687
Other operating income - Other operating income	157072		131161
Selling expenses - Selling expenses	3877503		3513105
Administrative expenses - Administrative expenses	150570		137796
Other operating expenses	181210		195239
Profit from operations -		763388		-118292
Financial expenses - Financial costs	28206		19022
Dividends & interest income	24510		16064
Profit before tax -		759692		-121250
Tax expenses - Tax expense	126578		29791
		633114		-151041
Extraordinary articles - Extraordinary items
Net profit for the period - Net income		633114		-151041

Profit statement based on cost classification by entity

Index	for 2012		for 2011
Revenues from sales - Net sales		8207745		6263775
Other operating income - Other operating income	157072		131161
Changes in inventories of finished goods and work in progress - Change in stocks of finished goods & in work in progress	76774		0
The cost of raw materials and materials - Costs of raw materisls & supplies	6789891		6317989
Personnel costs - Wages & salaries	589933
Depreciation expense - Depreciation	117169
Expenses for the purchase of finished goods - Purchases of goods for resale	0
Other operating expenses - Other operating expenses	181210		195239
Operating profit - Profit or loss from ordinary activities		763388		-118292
Financial expenses - Financial costs	28206		19022
Income from dividends and interest - Dividends & interest income	24510		16064
Profit before tax - Income before income taxes & extraordinary loss		759692		-121250
Tax and similar payments - Taxes & similar payments	126578		29791
Profit after tax - Income before extraordinary loss		633114		-151041
Extraordinary articles - Extraordinary items
Net profit for the period - Net income		633114		-151041

2. STRUCTURAL ANALYSIS. One of the important indicators of the degree of efficiency of the enterprise for a certain period is the economic structure of revenue that comes from buyers. Vertical analysis is also carried out according to the balance sheet data to assess the structural dynamics of the assets of the enterprise and the sources of their formation.

Vertical analysis of revenue

Indicators	Revenue structure as a percentage for the reporting year	Revenue structure as a percentage of the past
Revenues from sales	100	100
Cost of sold products (works, services)	41.33	42.58
Gross profit	58.67	57.42
Other operating income	1.91	2.09
Selling expenses	47.24	56.09
Administrative expenses	1.83	2.2
Other operating expenses	2.21	3.12
Profit from operations	9.3	-1.89
Financial expenses	0.34	0.3
Income from dividends and interest	0.3	0.26
Profit before tax	9.26	-1.94
Tax expenses	1.54	0.48
Profit after tax	7.71	-2.41
Extraordinary articles
Net profit for the period	7.71	-2.41

The increase in the share of net profit in the company's revenue was associated with:

cost reduction

lower selling costs

lower administrative costs

decrease in other operating expenses

growth in dividend and interest income

Diagram of structural changes in the composition of the Profit Statement

01.01.2012	01.01.2013

Structured balance sheet

Balance indicators	01.01.2013	01.01.2012
ASSETS
Current assets
1. Cash and cash equivalents	14.8	5.14
2. Short-term investments	0.33	7.53
3. Accounts receivable	17.14	16.81
	40.73	45.61
4.1. Raw materials and supplies	6.11	6.84
4.2. Unfinished production	14.25	15.96
4.3. Goods fit for sale	0	0
4.4. Finished products	20.36	22.8
4.5. Selling expenses	0	0
5. Prepaid expenses	0.59	0.36
6. And about current assets	73.58	75.45
Non-current assets
7. Long-term investment	14.27	7.3
8. Fixed assets	11.49	15.52
9. Intangible assets	0.2	0.29
10. Deferred tax assets	0.45	1.43
11. Other debtors	0	0
12. And about the assets of long-term use	26.42	24.55
13. Total assets	100	100
FINANCIAL OBLIGATIONS AND CAPITALS OF OWNERS
Current short-term financial liabilities
14. Invoices and bills payable	36.41	17.25
15. Accrued liabilities	2.52	24.38
15.1. Wage arrears	0	15.87
15.2. Tax arrears	0	6.82
15.3. Debt on dividends	0.25	0.27
15.4. Estimated reserves	2.27	1.42
16. Deferred income	0.09	0.08
17. Current portion of long-term debt	0	14.28
18.Tot about short-term financial liabilities	39.02	55.99
Long-term financial liabilities
19. Long-term loans	0	0
20. Deferred tax liabilities	0.84	1
21. And so about long-term financial liabilities	0.84	1
22. And so about financial liabilities	39.86	56.99
Owners' capital
23. Invested capital	1.93	2.31
24. Accumulated retained net income	33.71	11.99
25. Other accumulated comprehensive income	24.5	28.72
26. And about the capital of the owners	60.14	43.01
27. In general, financial liabilities and capital of owners	100	100

Vertical analysis of the balance sheet allows us to make a conclusion about the change in the sources of financing the assets of the enterprise and about the preservation of the structure of investments in various types of property.

During the analyzed period, the company increased the total book value of its assets by 464,769 thousand rubles. , or 22.93%.

This increase was due to increased investment in long-term types of property, which should have a positive effect on the production potential of the enterprise.

We can talk about an improvement in the financial condition of the enterprise for the reporting year, since the change in property by 134.83% was provided by its own sources.

Factors in the growth of enterprise assets

Indicators	Growth in assets	Share of participation
1. General change in the carrying amount of assets	464769	100
including from sources
2. Short-term financial liabilities	-162621	-34.99
3. Long-term financial liabilities	763	0.16
4. Equity capital	626627	134.83

Priority financing of property from its own capital provides the company with greater independence from creditors. It should be borne in mind that in cases of cheap credit resources, with a low interest rate of loan capital and a high rate of circulation of funds, it is beneficial for enterprises to attract significant borrowed funds into their turnover and effectively use large financial leverage.

Balance Structural Change Chart

01.01.2013	01.01.2012
asset structure
liability structure

3. ASSESSMENT OF LIQUIDITY. Liquidity refers to the availability of sufficient means of payment to pay creditors' bills on time and to pay contingencies when presented.

Liquidity ratio

Indicator name	01.01.2013	01.01.2012
Initial data for analysis
Current assets (CA)	1833222	1529084
Current liabilities (CL)	972107	1134728
Cash - CASH	368828	104238
Short-term investments in securities - Short-term marketable securities (STMS)	8231	152612
Receivables - Receivables (R)	426937	340691
Implementation - Sales (S)	8207745	0
Cost of sales (CS)	3392146	0
Accounts receivable (AR)	383814
Materials inventory (MI)	145423
Liquidity ratios
Working capital quota - Current ratio (CR = CA: CL)	1.89	1.35
Quick liquidity ratio - Quick ratio / acid-test ratio (QR = (CASH + STMS + R): CL	0.83	0.53
Cash liquidity ratio - Cash ratio (CASHR = CASH: CL)	0.38	0.09
Working capital - Working capital (WC = CA-CL)	861115	394356
Turnover ratio by calculations - Receivable turnover (RT = S: AR)	21.38	x
Inventory turnover ratio - Inventory turnover (IT = CS: MI)	23.33	x

One of the most important economic characteristics of the operational financial condition of the enterprise is the size of the "working capital". This indicator reflects the amount of financing of current assets by equity capital of the owners of the enterprise. The relative provision of the enterprise with "working capital" is measured using the indicator "working capital quota"

As of the end of the reporting year, "working capital" is equal to 861,115 thousand rubles. At the same time, the working capital quota was 1.89

The quick liquidity ratio is a more conservative (in comparison with the working capital quota) measure of liquidity, when the least liquid items (reserves and prepaid expenses) are excluded from current assets. As of the date of the analyzed balance sheet, the enterprise had 83 kopecks of mobile means of payment for 1 ruble of debts to pay them.

The cash liquidity ratio shows how the company's current liabilities are covered by the most liquid asset - cash. This is the most stringent criterion for the liquidity of an organization. At the enterprise, 38% of short-term debt obligations can be immediately repaid at the expense of funds.

The turnover ratio according to the calculations characterizes the size of accounts receivable and the effectiveness of the firm's credit policy. For an enterprise, this coefficient shows that, on average, the funds in the calculations turned around about 21.38 times. This means that the company had to wait about 16.84 days for the commercial loan to be repaid.

The Inventory Turnover metric indicates the relative size of the inventory. The smaller the inventory and the faster they turn around, the less money the company has in them. An increase in inventory may mean that some factor is preventing the sale of products. The turnover ratio of inventories for the enterprise was 23.33.

4. PROFITABILITY (profitability) - the ability to obtain an acceptable level of profit. Profitability ratios are used to assess the efficiency of an enterprise's economic activities.

Summary table of profitability ratios

Indicator name	for 2012	for 2011
Return on assets (return on assets)	0.28	x
Return on sales / rate of return (return on sale / net profit margin)	0.08	-0.02
Asset turnover ratio (Asset turnover)	3.63	x
Owner's return on capital (Return of equity)	0.53	x
Return on total enterprise investment (Return on investment)	0.55	x
Leverage	-0	x

Return on assets is the most commonly used measure of a company's profitability. The indicator is calculated as the ratio of net profit to the average annual value of assets (ROA = NP: TAavrg).

For each ruble invested in assets, the company received 28 kopecks in the reporting period. profit, which indicates the ability to generate profits and the effectiveness of the use of funds.

Return on sale / net profit margin shows how much net profit is contained in each dollar (or other currency) of sales (ROS = NP: S). Even a 1-2% difference can mean the difference between a normal and a very profitable year.

Net profit per ruble of sales increased by 10 kopecks, which indicates an increase in the efficiency of core activities.

Asset turnover ratio determines how effectively assets are used to increase sales (AT = S: TAavrg). In the reporting period, in order to receive revenue in the amount of 8,207,745 rubles, the assets had to turn around 3.63 times.

Return of equity characterizes the level of income derived from the capital invested by owners in a given enterprise (ROE = NP: Eavrg).

For an enterprise, the return on capital of the owner is 53%. The company's savings amounted to 53 kopecks. for one ruble of own investment. This is a fairly high profitability figure.

Return on investment is intended to reflect the return on investments made in the assets of the enterprise (ROI = NOPAT: (EQ + LTD)). According to the Balance Sheet and Profit Statement, this ratio is determined at 55%.

The value of the return on investment in assets indicates that 55 kopecks were received in the analyzed year. income from each ruble of all investments (both own and borrowed) made in this enterprise.

Leverage is the difference between the return on equity and total investment in the company's assets. At the analyzed enterprise, the leverage is -2%. Thus, the increase in the return on capital of the owners of the enterprise due to the attraction of borrowed resources from creditors into circulation is -2%.

5. PAYMENTABILITY (financial responsibility) - the ability of an enterprise to pay off its financial obligations.

Summary table of indicators of long-term solvency

Indicator name	for 2012	for 2011
Debt to equity ratio (Debt to equity ratio)	0.66	1.32
Loan interest security ratio (Times interest earned / Interest coverage ratio)	23.45	-6.94
Debt ratio	0.4	0.57

Debt to equity ratio shows the ratio of borrowed resources and equity capital (DTER = L: E).

This ratio decreased from 1.32 to 0.66.

Interest coverage ratio is one of the indicators of the degree of protection of lenders from unscrupulous payers (TIE = EBIT: INT).

The security of interest on loans increased, which is explained by the increase in the amount of net profit earned by the enterprise.

Debt ratio shows the share of assets that are financed by borrowed funds, and reflects the degree of protection of creditors (DR = L: TA).

The share of borrowed capital in financing the firm's assets decreased from 57% at the beginning of the year to 40% at the end of the year.

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The benefits of preparing financial statements in accordance with IFRS for most of its users are obvious. International financial reporting standards are designed to reflect the real state of affairs of the company - both foreign and national investors are interested in this. In order for the data to be verified and bear fruit, upon completion of the collection of information, an audit of financial statements in accordance with IFRS and its analysis begins. How are these processes different? Who conducts them? Why are they so important to a company's financial success? More on this later.

IFRS financial analysis and audit: key issues

To understand the difference between audit and analysis, it is enough to ask four questions: what (implies a process), why (it is carried out), who (does it) and how (it happens). So:

Audit of financial statements IFRS
What:	checking the reporting for its compliance with the requirements of international standards
Why:	to confirm the accuracy and adequacy of the reflected data
Who:	auditor - an independent expert; does not work in the company
How:	conducted in accordance with International Standards on Auditing

Audit of the first financial statements in accordance with IFRS

Due to the fact that many companies are just beginning the transition to IFRS, quite often auditors have to audit financial statements that have been compiled in accordance with International Standards for the first time.

In addition to the fact that the process of drawing up financial statements in accordance with IFRS is quite complicated in itself, its start has a number of additional features. In this case, the auditors first of all pay attention to the company's compliance with the requirements of IFRS 1 “First Use of International Financial Reporting Standards”. There, in addition to the usual criteria for auditing financial statements in accordance with IFRS, there are also additional ones.

The audit of the FIRST financial statements in accordance with IFRS includes:

• checking the correctness of determining the date of transition to IFRS and the first reporting period;
• the presence of a company statement about compliance with all international financial reporting standards
• verification of the correctness of the assessment of the reporting elements at the date of transition

Audit of methods of transition to IFRS

In the initial periods before the full transition to IFRS, companies use one of two main methods to prepare financial statements in accordance with International Financial Reporting Standards: the method of transformation of financial statements prepared in accordance with national standards, or the method of parallel reporting in accordance with International Financial Reporting Standards.

Transformation method
It is used by many companies due to its economy and simplicity. Transformation is a procedure for preparing financial statements in accordance with IFRS with adjustments to statements prepared in accordance with national standards.
An audit of financial statements compiled by the transformation method is carried out by assessing the content and quality of building a transformation model and includes, among other things, checking the compliance of transformation procedures with the procedure established in IFRS, as well as selective arithmetic verification of the calculations.

Parallel accounting
This is a consistent reflection of each business transaction in the report separately according to national accounting rules and IFRS. Therefore, in companies that use the parallel accounting method, when auditing financial statements in accordance with IFRS, it is no longer necessary to check statements drawn up according to national rules, since all business transactions are consistently reflected on the basis of international standards. The composition, content of financial statements in accordance with IFRS is studied, the compliance of reports with regulatory documents is considered, indicators are monitored, and one and a half of financial statements are filled out.

The principle of auditor independence

During the period of the company's transition to IFRS, among the services that auditors can provide to such organizations, there is both an audit of financial statements prepared in accordance with IFRS, and advice on the preparation of financial statements in accordance with IFRS. However, in this case, it is worth remembering that one company cannot help in the preparation of financial statements and audit them, since this is contrary to the requirements of the International Standards on Auditing. The principle of auditor independence is important to ensure confidence in audit quality.

The procedure for auditing financial statements prepared in accordance with IFRS includes:

• checking the reporting for its compliance with the International Financial Reporting Standards;
• collection of evidence that confirms the compliance of the financial statements with all the criteria for its preparation, the reliability and completeness of the disclosure of information contained in it;
• assessment of the principles of accounting at the enterprise;
• assessment of the provided financial statements as a whole, drawing up a conclusion regarding the subject of the audit, including the reflection of the factor for the identification of which it was carried out

Financial analysis of statements prepared in accordance with IFRS

There are a number of main areas of analysis of financial statements under IFRS:

1. Trend analysis - compares changes in financial statements for a certain period. The optimal period of time for research is considered to be a period of 5 years, although more is possible (however, in this case, the amount of data that needs to be compared also increases).
2. Percentage analysis - the indicators of another organization from the "native" industry are used as a comparative base. In this case, it is important to address the size mismatch. To ensure this, the values ​​of the indicators of the profit and loss statement are prescribed as a percentage of sales, while the indicators of the balance sheet are a percentage of the total of all assets.
3. Analysis of information by segments - gives an idea of ​​the corporate strategy, allows you to assess the importance of certain segments of the company.
4. Analysis based on financial ratios - examines in detail the financial condition, the results of previous financial activities, as well as the potential for cooperation with investors.
5. Cash flow analysis - carried out to determine the company's ability to provide itself with an excess of cash receipts over payments. A cash flow statement is used as an information base.

It is necessary to conduct an analysis in accordance with IFRS, focusing on the final addressee of such information. So, the investor will probably want to know the level of profitability of your company, and the lender will want to know the indicator of its liquidity.

Modern market relations are characterized by increased competition, technological changes in production, as well as the continuous flow of new information. In such conditions, the preparation of financial statements in accordance with IFRS, together with the timely audit and analysis of such reports, is the best option to create a universal “facade” for your company that can provide it with new investments and business expansion.

International Financial Reporting Standards (IFRS) are a set of documents (standards) that regulate the rules for the preparation of financial statements required by external and internal users to make economic decisions in relation to an enterprise. The list of organizations that present and publish financial statements in accordance with IFRS is annually expanding. According to paragraph 1 of Art. 2 of the Federal Law of 27.07.2010 No. 208-FZ "On Consolidated Financial Statements", financial statements in accordance with IFRS are prepared by:

• 1) credit organizations;
• 2) insurance organizations (with the exception of medical insurance organizations operating exclusively in the field of compulsory health insurance);
• 3) non-state pension funds;
• 4) management companies of investment funds, mutual funds and non-state pension funds;
• 5) clearing organizations;
• 6) federal state unitary enterprises, the list of which is approved by the Government of the Russian Federation;
• 7) open joint stock companies, the shares of which are in federal ownership and the list of which is approved by the Government of the Russian Federation;
• 8) other organizations whose securities are admitted to organized trading by including them in the quotation list.

RAS (Russian Accounting Standards) is a set of norms of the federal legislation of Russia and the Accounting Regulations (PBU) that regulate accounting rules.

An increasing number of Russian enterprises need to prepare financial statements not only in accordance with Russian accounting rules, but also in accordance with international standards. Understanding the fundamental differences between RAS and IFRS will allow the company to switch to accounting in accordance with international standards at minimal cost, as well as to analyze financial statements in the best quality. The main differences between IFRS and RAS that affect the analysis of an organization's financial statements are presented in Table 1.

Table 1 Main differences between IFRS and RAS

Comparative feature			Assessment of the impact on the analysis of financial statements
Purpose of using financial information	Reflection of property status	Reflection of the real financial situation	IFRS has a higher degree of compliance with the real state of affairs of information in the reporting
Basic principle of asset recognition	Availability of supporting documents	The possibility of obtaining economic benefits from the object	In RAS, an unlikely receivable may be recognized as an asset, which will distort the subsequent financial analysis.
Initial cost of fixed assets	The amount of actual costs is recognized. Discounting is not applied in determining the initial cost of fixed assets.	Recognized in the reporting at cost. If payment for fixed assets is deferred for a significant period of time, then the initial cost of fixed assets is equal to the present value of future payments.	The lack of discounting distorts the objectivity of RAS reporting, but increases the reporting indicators: accounts receivable, profit, and so on.
Recognition of expenses	The expense is recognized in the accounting, if a contract is concluded, documentary evidence is required	Expenses are recognized on a matching basis. No documentary evidence is required.	IFRS reporting is based on information of a higher quality than RAS. However, the data on expenses in RAS are reliable, as there is documentary evidence.
Revenue recognition condition	Income from ordinary activities is recognized in the financial statements based on legal confirmation (agreement or other document)	Revenue recognition is linked to the moment of transfer of significant risks and rewards arising from the ownership of the goods.	The moment of transfer of significant risks and rewards arising from the ownership of the goods, in general, may differ from the date of transfer of ownership, indicated in the agreement (or other document)
Balance Sheet Equation	Assets = Liabilities	Assets - Liabilities = Equity	The effectiveness of the organization under IFRS is assessed by making a profit. RAS allows for both profit and loss.
Inflation adjustment	RAS statements are compiled without inflation adjustment	Non-monetary balance sheet items should be inflation re-calculated in case of hyperinflation	Analysis of data in accordance with IFRS gives a more realistic picture of the state of affairs in the organization

The differences between IFRS and RAS are due to the historical purpose of the use of financial information. IFRS aims to reflect the real financial position of the enterprise, RAS - the property status. The main users of financial statements prepared in accordance with IFRS are investors and financial institutions. The compilation of Russian financial statements primarily pursues fiscal goals, this information is required by the tax authorities, statistics authorities.

Russian reporting of organizations is aimed primarily at minimizing taxes. IFRS - aimed primarily at satisfying the interests of investors and other users who are not associated and do not have access to reporting. It is the interests of investors that largely reflect the needs of other users. Since they are the providers of capital and, to a greater extent, do not influence the decisions made on the preparation of reports. Therefore, meeting their needs will also help meet the needs of other users.

RAS is quite tightly linked to the legislative and regulatory system in the Russian Federation, and IFRS are supranational standards, independent of laws. In practice, financial statements oriented to the requirements of tax legislation often contain distorted financial information, on the basis of which it is difficult to determine the real capitalization of the organization and establish its actual financial position. And this, in turn, does not at all contribute to the inflow of investments into the Russian economy, increases the price of incoming capital and, therefore, negatively affects the expansion of the tax base.

However, this does not mean that IFRS is fully capable of reflecting the real financial condition of an enterprise that meets all the requirements of users, while RAS is not capable. This is evidenced by the practice of their application. Distortion and falsification are present in both IFRS and RAS. Consequently, without control and responsibility for compliance with certain rules, it is impossible to implement both IFRS and RAS.

As can be seen from Table 1, the main principle for recognizing assets in accordance with IFRS is "the possibility of obtaining economic benefits from an object", in RAS - "availability of supporting documents". If a company acquires a fixed asset with a deferred payment, then in accordance with IAS 16 "Fixed Assets", the initial cost of such fixed asset is formed at a discount, since in fact the organization made the purchase cheaper. The choice of the discount rate is subject to professional judgment. RAS does not use the principle of discounting and determine the initial cost of an object at the nominal value of payments. The absence of such a method distorts the objectivity of RAS reporting, but increases such reporting indicators as accounts receivable, profit, and so on. Unlike IFRS, RAS does not establish that "assets" are acquired for the purpose of obtaining economic benefits (profits) and that economic transactions recorded in financial accounting as income and expenses must meet the definition of the elements "income", "expenses", and each of them is also at the same time also defining the element "assets", since expenses are carried out with the aim of making a profit in the future (economic benefit due to the excess of income over expenses).

Another fundamental difference is the recognition of costs. The conformity requirement that expenses are recognized in the period of expected income is central to IFRS. Expenses are recorded as they become due, not when money is paid or received. Consequently, there may be accumulations in the financial statements (when expenses have already been incurred, and the corresponding amounts are not yet payable and prepaid, when the amounts have already been paid or liabilities have been recorded, even if the costs associated with them relate to the subsequent reporting period).

In PBU 10/99 "Organization's expenses" an additional condition is included that the expense is recognized in the accounting, if an agreement is concluded. That is, unlike IFRS, the expense cannot be recognized only on the basis of the professional judgment of the accountant about the decrease in economic benefits and must be documented. For example, the costs of bonuses to employees. As a rule, year-end bonuses are approved in May-June of the next year. In Russian accounting, costs are reflected after the accrual of premiums, that is, in the cost of the next reporting period. Consequently, financial statements under IFRS reflect financial results more realistically than under RAS.

The condition for the recognition of revenue in accordance with PBU 9/99 is the approach in which income from ordinary activities is recognized in the financial statements based on specific legal confirmation (agreement or other document). IAS 18 links the recognition of revenue to the moment of transfer of significant risks and rewards arising from ownership of goods. The specified moment may differ from the date of transfer of ownership, indicated in the contract (or other document). The main differences in revenue recognition in accordance with RAS and IFRS are presented in table 2, compiled on the basis of RAS 9/99 "Income of the organization" and IFRS 18 "Revenue".

Table 2 Differences in revenue recognition in IFRS and RAS

Comparative feature
Revenue recognition	There is confidence that there will be an increase in economic benefits. The amount of revenue can be determined.	The perceived economic benefit is likely to be realized. The total contract revenue can be measured reliably.
Moment of revenue recognition	Revenue is recognized when there is a transfer of ownership based on specific legal evidence (agreement or other document).	Revenue is recognized when there is a transfer of significant risks and rewards of ownership.
Revenue estimation	The amount of revenue is determined based on the price specified in the contract	Revenue is measured at the fair value of the consideration received, taking into account trade discounts and rebates presented.
Legal regulation	Various types of operations are regulated by one normative act (PBU 9/99)	Various types of operations are regulated based on general principles
Recognition of shareholder contribution as revenue	The contributions of the members of the LLC, which are not formalized as contributions to the authorized capital or contributions to property, are recognized as the income of the organization	Contributions received from existing shareholders are not recognized as income or revenue

IFRS - International Financial Reporting Standards Is a set of documents governing the rules for drawing up financial statements of enterprises. Businesses wishing to publicly sell their shares on the stock market must publish their financial statements. This was done so that potential investors could objectively assess the economic situation of the company. The form of financial statements, thanks to IFRS, is unified and easy to read, and the information that is reflected in it is sufficient for an objective assessment. Thanks to financial reports, investors can assess the economic prospects of the company and make an appropriate decision whether to invest their money in stocks or not.

As I already wrote in the article, a portfolio strategy involves the selection of shares of those companies that meet the criteria for selecting an investor. Each has its own specific approach to stock valuation. It is the effectiveness of these criteria that is the key to investor success.

What they pay attention to when choosing stocks:

1. Return and risk from fluctuations in market value based on historical data.
2. Correlation (unidirectionality) of the dynamics of quotations with other securities and indices.
3. The financial position of the company.
4. The financial condition of the industry and the country's economy.
5. Data of technical and price analysis of the value of the security.

Of course, this is not a complete list of what is important to consider when choosing an investment object. Some investors carry out a thorough analysis of all the above points and are not limited to this. Others put a lot of emphasis on just a few of them. For example, Warren Buffett does not attach any importance to fluctuations in stock prices, does not apply technical analysis to charts, and does not look for any correlations. As he puts it: “I never solve equations with Greek letters” (correlations are determined through the so-called coefficients α and β). But he closely delves into the financial and annual reports of companies, and by no means for the last year, but at least for the last 10 years.

The financial statements contain all the most valuable information about the company's activities. The company can have beautiful signs on the facade and at the same time sit "head over heels" in debt. Conversely, behind an unremarkable name, a very strong company from an economic point of view can be hidden. In the financial statements, it all comes out.

In our country, there are two forms of financial reporting in accordance with IFRS and RAS (Russian Accounting Standards). In general, there are slight differences between them, but investors are more likely to use IFRS reporting. I suggest that you familiarize yourself with it.

Financial reports are published quarterly and year-end. As a rule, for comparison, they provide data not only for the reporting period, but also for the same past. For example, a 2016 report will also contain data for 2015.

An IFRS financial report consists of three main parts:

1. Profits and Losses Report... It reflects all the company's income and expenses, tax payments, income that can be taken into account in future reports, etc. during the reporting period. Read more in the article.
   
2. Statement of financial position... It consists of three sections: assets, liabilities and equity. Assets are everything that a company has - equipment, stocks of finished products and raw materials, cash, buildings, licenses, patents. Liabilities are the debts of the company. Capital is equity, that is, what remains of the difference between assets and liabilities. For example, if the company's assets (factories, equipment, finished products in warehouses) are estimated at 100 million rubles, and its liabilities (in the form of loans) are 30 million rubles, then the company's capital will be 70 million rubles. The statement of financial position is always prepared for a specific date, for example, December 31st. Read more in the article.
   
3. Cash flow statement... This is a kind of cash desk for the company. It shows how much money was received by the company during the reporting period, how much of it and for what purposes it was spent. This report makes it difficult for accountants to falsify data. Read more in the article.
   

The financial statement also includes Statement of changes in equity... It discloses information about changes in capital for the reporting period, transactions with treasury shares, dividends, etc. Many positions in the report are accompanied by comments, which can contain very useful information. Some companies may use various tricks in order to disguise figures that are undesirable for everyone to see, for example, depreciation of fixed assets. This data is disclosed not in the main report, but in the comments. The report is accompanied by the opinion of an independent auditor confirming the accuracy of the figures presented.