By Order No. 310 dated June 9, 2023, the Ministry of Finance approved changes to some methodological recommendations on accounting for public sector entities, approved by Order No. 11 of the Ministry of Finance dated January 23, 2015. Namely to:
- Methodological recommendations for accounting of fixed assets of public sector entities.
In particular, it was clarified that the object of fixed assets can be obtained as a result of exchange for another asset in accordance with the legislation. The initial cost of the received object of fixed assets is its fair value on the date of posting. If the fair value of the received or transferred object of fixed assets cannot be determined, then the initial value of the received object of fixed assets is the initial (revalued) value of the transferred asset, taking into account the amount of depreciation.
Infrastructure assets meet the definition of fixed assets and are accounted for as separate items of fixed assets, including road networks, sewage systems, water and electricity systems.
The liquidation value may increase to the book value of the object or exceed it. In this case, the depreciation charge is equal to zero until its liquidation value is reduced to an amount lower than the book value of the object.
The period of useful use (exploitation) and the liquidation value of the object of fixed assets are reviewed at the end of the reporting year in case of changes in the expected economic benefits from its use.
Depreciation of fixed assets is calculated taking into account the new period of useful use and liquidation value starting from the month following the month of change in the period of useful use and/or liquidation value.
A change in the period of useful use and a change in the liquidation value of an object of fixed assets are reflected as changes in accounting estimates in accordance with NAS in the public sector 125 “Changes in accounting estimates and correction of errors”.
- Methodological recommendations for accounting of stocks of public sector entities.
It has been clarified that methodological recommendations do not apply to:
- unfinished works under construction contracts, including contracts for the provision of services directly related to them;
- financial instruments;
- biological assets associated with agricultural activities and agricultural products during harvest.
Methodological recommendations do not apply to the valuation of stocks held by public sector entities after harvest, to minerals and mineral raw materials, provided that they are valued at net realizable value in accordance with other NAS in the public sector, except for standard 123 ” Reserves”.
- In Appendix 1 to the Methodological recommendations on the accounting policy of a public sector entity in the new version, lines 5 “Working animals” and 6 “Perennial plantations and fruit-bearing plants” are set out.