The Institute of Accounting of the Republic of Lithuania
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Transcript of The Institute of Accounting of the Republic of Lithuania
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Wednesday, September 7, 2005
The Institute of Accounting of the Republic of Lithuania
The role of a National
Accounting Standards Setter in the European
Union
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Wednesday, September 7, 2005
Overarching aim• Improvements to national accounting
system– from rules based (tax liked) rules approved by
Ministry of Finance– to independent standards setting system
• full convergence with– European Union (EU) Directives – in respect to current situation in Lithuania
achieved by
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• active cooperation with– relevant EU institutions responsible for
accounting issues and– International Accounting Standards
Board and– other national accounting standards
setters of EU countries
and
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• enlightenment of professional society– of international practice in accounting
by– translating IAS/IFRS and – giving explanations for application by– articles in professional journals and
discussions in conferences while– inviting experts of IASB
executed by
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• the Institute of Accounting of the Republic of Lithuania (IoA) – the non-profit organization – established in under the Law of
Accounting
whose activity
is
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• preparation of national accounting standards (Business Accounting Standards (BAS));
• training of accounting professionals;• participation in the IASB and EU
institutions activity concerning accounting issues
and
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structure
The Institute of Accounting of the Republic of Lithuania
Founders – the highest
body of the
Institute
the Board of Standards –
approvesBAS and
methodical recommenda –
tions
the Adminis –tration – runs the
activity of the Institute
thatare
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– Ministry of Finances – 50 % voting rights and
– Private audit companies and autonomous professional organizations – 50 % voting rights
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Objectives of the Accounting Standards Board•principles guiding the
establish of BAS:–principle 1 – independent
standard setting:– independent board members– meetings of board could be attended by
public– thorough due process– no political influence
and
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– principal 2 – practice based standards:• methodical recommendations for• each BAS• based on realistic situations in practice• prepared along with relevant standard
leadto
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–high quality standards•understandable•enforceable•transparent and comparable information
… to help users to make economic decisions.
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•preparing and / or amending BAS: – procedure:
•working draft•co-ordination draft
–outgoing for the coordination with different institutions
•discussion draft•confirmed business accounting standard
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– practice•BAS, approved and published till 1
January, 2005– 25 BAS concerning – implementation guidance on financial
reporting together
•with methodical recommendations for each standard
exactly
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• BAS 1 Financial reporting• BAS 2 Balance sheet• BAS 3 Income statement• BAS 4 Statement of changes in equity• BAS 5 Cash flow statement• BAS 6 Explanatory notes• BAS 7 Changes in accounting policies,
accounting estimates and correction of errors
• BAS 8 Equity• BAS 9 Inventories• BAS 10 Revenue from sales
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• BAS 11 Cost of sales and operating costs• BAS 12 Non-current tangible assets• BAS 13 Intangible assets• BAS 14 Business combinations• BAS 15 Investments in associates• BAS 16 Consolidated Financial Statements
and Investments in Subsidiaries• BAS 17 Biological assets• BAS 18 Financial assets and financial
obligations• BAS 19 Provisions, contingent liabilities and
contingent assets, and events occurring after the balance sheet date
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• BAS 20 Operating lease, financial lease and loan-for-use
• BAS 21 Grants and subsidies• BAS 22 Changes in foreign exchange rates• BAS 23 Impairment of assets• BAS 24 Income tax• BAS 25 Construction and other long term
contracts
thatare
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• announced immediately as approved – in the official publication of Lithuanian – on website of IoA
• all standards and methodical recommendations as well as discussion drafts – in Lithuanian language
• all standards – in English language
www.apskaitosinstitutas.lt
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•projects on the agenda–at the point of exposure draft
»amendments for BAS 12 Property, plant and equipment
»BAS 29 Interim financial reporting»BAS 35 Reorganization of the
companies»BAS 36 Unlimited liability legal
entities accounting– at the point of discussion paper
»BAS 30 Related parties»BAS 34 Segment reporting
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•addressing urgent issues promptly– standards – if
• widespread and • practical relevance with• necessity to prepare in short time
– inquiries from different entities• in 10 days – if not arguable• in one month – if arguable
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• International cooperation with
– relevant EU institutions – ARC, EFRAG, – IASB – national standard-setters of other EU
countries – Latvia, Estonia and etc. for
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– participation actively in the process of development of EU Directives and setting/amending IAS/IFRS for
– international practice and explanations according relevant issues and
– personal practice to share
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•structure of the Standards Board– 4 full-time and 5 part-time members– sole responsibility for setting agenda
and standards– presently from different institutions and
companies exactly
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– 1 member − Ministry of Finance– 2 members − audit and accounting
professionals– 1 member − Securities Commission– 1 member − Insurance Supervisory Commission – 4 members – full time members
… and 2 representatives from Tax Department as permanent visiting participants
that
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• the Standards Board’s work is supported by:– 4 technical staff that– consist of
• 2 experts of accounting – prepares standards, methodical
recommendations and– answers to inquiries
• linguist – gives explanations over phrase of provisions
• lawyer – gives explanations of compliance with other laws and
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• the Standards Board’s work is financed from: – state budget– commercial activity of IoA
• publishing – binders of BAS and methodical recommendations
• seminars and courses – for accounting and audit professionals
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Early changes
• Change of founders– exclusion of private audit companies
• Withdrawal of commercial activity as– to be financed only from state budget