How to correctly prepare management reports in accordance with international standards

How to correctly prepare management reports in accordance with international standards

To date, the preparation of management accounts under International Financial Reporting Standards (IFRS / US GAAP) for enterprises operating in Russia remains relevant.

Due to the instability of the ruble and potential financial losses that may be incurred while waiting for repayments, investors and credit institutions are wary of business financing and place high demands on the reliability and quality of the submitted reports. Entrepreneurs increasingly realize the need to prepare main financial statements (financial position statement, financial results report, cash flow statement) based on a transparent algorithm understandable to Russian and foreign partners.

The following companies should approach the preparation of management accounts under IFRS with special care:

  • companies attracting financing from financial institutions
  • companies conducting operations with foreign counterparts
  • companies trading on the stock exchange
  • companies that are part of a holding company abroad and/or with foreign capital
  • companies voluntarily switching to IFRS.

Developing guidelines and principles for preparing management accounts under IFRS, mapping accounts, developing a transformation table, and analyzing adjustment entries in order to compensate for differences between Russian Accounting Standards (RAS) and IFRS are difficult and time-consuming tasks that require comprehensive analysis and integrated approach.

SCHNEIDER GROUP offers a wide range of services to transform and prepare financial statements under international standards (IFRS / US GAAP):

  • Transforming RAS financial statements to IFRS on an annual, quarterly, or monthly basis
  • Preparing all IFRS financial statements in English, German, and Russian languages
  • Preparing the first full set of IFRS financial statements for the first-time adoption of IFRS
  • Organizing and setting up the transition from RAS financial statements to IFRS within a company
  • Assessing the quality of IFRS financial statements, including analyzing potential risks and developing measures to address them
  • Setting up a management accounting system as a basis for forming IFRS financial statements
  • Developing a management accounting policy in accordance with the main provisions and principles of IFRS and the Group’s corporate policy
  • Advising on the interpretation of various provisions of international standard
  • Automating the process of transformation from RAS financial statements to IFRS, including selecting appropriate software

It is also possible to determine the qualitative level of existing reporting using a new diagnostic tool which SCHNEIDER GROUP currently offers on a complimentary basis.

Correctly setting the management accounting system and forming a transparent algorithm to form financial indicators allows qualitative and reliable reporting and also serves as an effective corporate management instrument. Management will be able to make rational decisions affecting profitability, turnover of assets, liquidity, and solvency of the company based on these indicators, allowing them to realize the main goals of the company.

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