Importance The article focuses on the improvement of the methodology for combined accounting and preparation of combined financial statements in accordance with International Financial Reporting Standards applicable to consolidated financial statements. Results The article examines the methodology for combined reporting in business structures under common control, i.e. groups of companies, which are effectively controlled by the same individual or several individuals through direct interest in authorized capital of each entity of the group. The research determines the regulatory framework for combined reporting, and outlines an algorithm for the preparation. The article states the difference between combined financial statements and consolidated ones. We formulate the concept of combined accounting; determine the scope, entities and methods; substantiate the chart of accounts in combined accounting of an integrated business structure under common control. We also propose the methods for eliminating intracompany turnover, balances and unrealized profit in preparing combined financial statements based on these consolidated reporting methods. The article gives numerical examples how the results the article mentions may be used. Application The article describes the combined reporting methodology, which may be used in the Russian integrated structures under common control. Conclusions and Relevance The Russian integrated business structures under common control (especially those ones that do not plan restructuring and divestiture of the parent and subsidiary companies) prepare combined financial statements since it is an objective business need and a tool to comply with the substance over form principle. It became very important and relevant to adopt a regulation that would govern the combined reporting rules and principles.
Keywords: integrated business structure, common control, combined financial statements, consolidated financial statements, International Financial Reporting Statements, IFRS, combined accounting
References:
Berg O. Konsolidirovannaya finansovaya otchetnost' [Consolidated financial reporting]. Rossiiskii bukhgalter = Russian Accountant, 2014, no. 8, pp. 10–16.
Burlakova O.V. Razvitie konsolidirovannogo ucheta v Rossiiskoi Federatsii [Development of consolidated accounting in the Russian Federation]. Available at: Link. (In Russ.)
Burlakova O.V. Sovremennye metodologicheskie problemy konsolidirovannogo ucheta [Modern methodological issues of consolidated accounting]. Moscow, Bukhgalterskii uchet Publ., 2008, 366 p.
Vyruchaeva A. Kombinirovannaya otchetnost': sostavlyaem otchet po MSFO [Combined reporting: the preparation of a report under IFRS]. Aktual'naya bukhgalteriya = Current Accounting, 2013, no. 8, pp. 93–96.
Generalova N.V., Karel'skaya S.N. Evolyutsiya regulirovaniya konsolidirovannoi finansovoi otchetnosti v Rossii [The evolution of the consolidated financial reporting regulatory framework in Russia]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2014, no. 29, pp. 13–28.
Generalova N.V., Sokolova N.A. Gudvill v finansovoi otchetnosti po MSFO [Goodwill in financial reporting under IFRS]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 16, pp. 16–27.
Generalova N.V., Sokolova N.A. Logika priznaniya i pervonachal'noi otsenki gudvilla po MSFO [The logic of recognition and initial evaluation of goodwill under IFRS]. Auditorskie vedomosti = Audit Bulletin, 2014, no. 7, pp. 22–40.
Ivanov A.E. Delovaya reputatsiya kompanii (gudvil) kak proektsiya sinergeticheskogo effekta ee deyatel'nosti na finansovuyu otchetnost' [Goodwill of an entity as reflection of the synergistic effect its activities have on financial reporting]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 34, pp. 18–26.
Karetskii A.Yu. Printsipy i podkhody k formirovaniyu konsolidirovannoi finansovoi otchetnosti v sootvetstvii s trebovaniyami MSFO [Principles and approaches to consolidated financial reporting under IFRS]. Mezhdunarodnyi bukhgalterskii uchet = International Accounting, 2013, no. 14, pp. 27–37.
Kiselev A. Kak sostavit' kombinirovannuyu finansovuyu otchetnost' [How to prepare combined financial statements]. Available at: Link. (In Russ.)
Kleutin A. Kak podgotovit' konsolidirovannuyu otchetnost' bez yuridicheski oformlennogo kholdinga [How to prepare consolidated financial statements without a legally registered holding]. Finansovyi direktor = Financial Director, 2013, no. 5, pp. 72–75.
Liberman K., Shestakova E., Popyatnov I. Konsolidirovannaya i otdel'naya finansovaya otchetnost' [Consolidated and separate financial reporting]. Rossiiskii bukhgalter = Russian Accountant, 2013, no. 1, pp. 8–24.
Moderov S. Bystraya konsolidatsiya finansovoi otchetnosti po MSFO – ispol'zovanie sovmestimoi otchetnosti [Rapid consolidation of financial reporting under IFRS: use of consistent financial statements]. Bukhgalteriya i banki = Accounting and Banks, 2014, no. 6, pp. 8–15.
Moderov S.V. Kombinirovannaya finansovaya otchetnost' i proforma finansovoi otchetnosti – praktika ispol'zovaniya rossiiskimi kompaniyami [Combined financial statements and proforma financial statements: the Russian companies’ practice]. Korporativnaya finansovaya otchetnost'. Mezhdunarodnye standarty = Corporate Financial Reporting. International Standards, 2013, no. 2, pp. 52–67.
Palii V.F. Mezhdunarodnye standarty ucheta i finansovoi otchetnosti [International Standards of Accounting and Financial Reporting]. Moscow, INFRA-M Publ., 2013, 506 p.
Pyatov M.L. Printsip prioriteta soderzhaniya nad formoi v Rossii [The substance-over-form principle in Russia]. Available at: Link. (In Russ.)
Sokolov Ya.V. Gudvil – bol'shaya novost' [Goodwill is a big news]. Available at: Link. (In Russ.)
Tolstonogova M.N. Analiz zakonodatel'noi bazy konsolidatsii finansovoi otchetnosti grupp predpriyatii [Analysis of the legislative framework for consolidation of financial reporting in a group of companies]. Available at: Link/13.pdf. (In Russ.)
Shchadilova S.N. Podgotovka konsolidirovannoi otchetnosti v sootvetstvii s MSFO [Preparation of consolidated financial statements under IFRS]. Auditor, 2014, no. 4, pp. 60–67.
Yukhnov A.S. Konsolidatsiya otchetnosti gruppy kompanii – vnesem yasnost' [Consolidation of group financial reporting: clarifications]. Available at: Link. (In Russ.)
Yastrebkova E. Eliminirovanie vnutrigruppovykh oborotov pri konsolidatsii [Elimination of intercompany balances in consolidation]. MSFO: Praktika primeneniya = IFRS: Practical Application, 2006, no. 6, pp. 54–61.
