By Nick Mann | 7 February 2013
Russia has finalised proposals to adopt national accounting rules based on International Public Sector Accounting Standards as it aims to improve the efficiency and effectiveness of government spending.
The initiative, which is being run under the World Bank’s Treasury Development Project, aims to improve the governance of Russia’s public finances by presenting more complete, true and fair financial information. It has been run by the Russian Ministry of Finance, with the involvement of the Moscow-based public finance research centre, the Institute for Financial and Economic Monitoring, and global consultancy KPMG.
Russia has applied accruals-based accounting for all public sector entities since 2006. But Svetlana Tabalina, a senior expert at the IFEM, told PF International that the project to introduce Ipsas-based standards would ‘provide more qualitative and useful accounting information on [the] financial position and financial results of public sector entities for decision-making and accountability purposes.
‘Among the other purposes are more transparent financial reports of public sector entities, and higher quality of public finance management.’
The Ipsas work, which began in February 2011, led to five national accounting standards being drawn up and finalised, after a public consultation, in June 2012. These include a Conceptual framework for public sector accounting and financial statements, which establishes the underlying characteristics of accounting and financial reporting, such as the aims of public sector financial reporting and the needs of users of public sector financial statements.
Another of the standards covers presentation of financial statements, involving a ‘new form’ for presenting information on public sector bodies’ performance and financial position.
‘The existing forms of financial statements in the Russian Federation are very numerous and complicated, the classification of assets and liabilities is closed to the government finance statistics, but not to accounting – that makes it difficult for understanding and decision-making and accountability purposes,’ Tabalina noted.
The three further standards address leases, the impairment of assets, and property, plant and equipment. These, Tabalina explained, were chosen because of the large amount of property held by the Russian public sector, which means reliable information on long-term assets is particularly useful.
The standards are expected to be approved this year and introduced in 2014. Tabalina said that while they were not a ‘simple copy’ of Ipsas, the main principles of the international standards would be retained.
‘The elaboration of national standards on the base of Ipsas will take approximately three to four years’, she added. She confirmed that the accounting standards would be applied to all levels of Russian government – central government, sub-national level and municipalities – as they came into effect.
However, concerns have been raised that these proposals only approximate to Ipsas rather than implementing them fully. Ian Carruthers, CIPFA’s director of policy and technical, said: 'although it is welcome to see Russia adopting standards based on Ipsas, more comprehensive implementation is preferable.
Exact details have yet to emerge, we will see over the coming months how closely these standards mirror Ipsas and what they choose to leave out.'
