Generating consolidated statements based on NAS data

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Clause 91 of Order of the Ministry of Finance of the Russian Federation dated 07/29/1998 No. 34n (as amended on 04/11/2018) "On the Approval of the Regulations for Accounting and Reporting in the Russian Federation" states that "if a company has subsidiaries or affiliates, it shall draw up consolidated financial statements in addition to its own accounting report, which include the indicators of the reports of such companies located in the Russian Federation and abroad, in the order prescribed by the Ministry of Finance of the Russian Federation."

Letter of the Ministry of Finance of the Russian Federation dated 01/24/2011 No. 07-02-18/01 "Recommendations to Audit Companies, Individual Auditors, and Auditors on Conducting an Audit of the Annual Financial Statements of Companies for 2010" recommends the following regarding compiling consolidated financial statements: "In accordance with the Regulations for Accounting and Reporting in the Russian Federation approved by Order of the Ministry of Finance of the Russian Federation dated 07/29/1998 No. 34n, if a company has subsidiaries or affiliates, it shall draw up consolidated financial statements in addition to its own accounting report, which include the indicators of the reports of such companies located in the Russian Federation and abroad. Consolidated financial statements for 2010 are compiled in accordance with the Guidelines for the Preparation and Presentation of Consolidated Financial Statements approved by Order of the Ministry of Finance of the Russian Federation dated 12/30/1996 No. 112."

The Guidelines according to Order of the Ministry of Finance of the Russian Federation dated 12/30/1996 No. 112 (as amended on 12/24/2010 and 09/14/2012) "On Guidelines for the Preparation and Presentation of Consolidated Financial Statements" approved by this document were not applied by companies since 01/01/2013, except for the companies specified in Part 2 of Article 8 of Federal Law dated 07/27/ 2010 No. 208-FZ “On Consolidated Financial Statements”, due to issued Order of the Ministry of Finance of the Russian Federation dated 09/14/2012 No. 126n, and were canceled. The document became null and void on 01/01/2016 because Order of the Ministry of Finance of the Russian Federation dated 09/14/2012 No. 126n was issued.

Thus, clause 91 of Order of the Ministry of Finance of the Russian Federation dated 07/29/1998 No. 34n (as amended on 04/11/2018) "On the Approval of the Regulations for Accounting and Reporting in the Russian Federation" mentions "consolidated financial statements" but has no guidelines for its compilation. Companies can develop their own guidelines for the compilation and submission of consolidated financial statements as there are no approved guidelines.

If a company needs to submit consolidated financial statements of a group of companies generated based on NAS statements and the IFRS principles in a short time, you can generate such statements automatically provided that you meet all the below requirements.

Requirements for accounting data

To generate consolidated financial statements of a group of companies based on NAS statements and the IFRS principles, meet the following main requirements for accounting data:

Account for business transactions of companies for NAS in 1C:Perform.

Use a single self-financing chart of accounts for all consolidated companies.

List of consolidated companies

To specify a list of companies to consolidate, that is, a consolidation perimeter, you can:

Use the primary method.

Select a company list to generate reports.

The main way to set the parameter of consolidated companies is to determine "Regulation for preparing reports". To do it, go to the "Budgeting, reporting, and analysis" subsystem and click Budgeting classifiers – Regulations for preparing reports. Here specify a list of group companies and an Eliminating company to record the company's intercompany turnovers excluded upon company consolidation. The company list can include additional technical companies, such as the Investment elimination company, at the level of which you can display the required entries for the data consolidation level. For example, expense accruals for copies of documents whose originals have not been received yet by the company and other transactions that are recorded incorrectly on the NAS GL accounts of a real company but must be recorded in the consolidated financial statements prepared based on the NAS data. The system does not limit the number of companies in the "Report preparation regulation" and the number of companies for the generation of consolidated financial statements based on the NAS data.

To generate a "Consolidated trial balance", select an company list in the "Consolidated trial balance" settings and specify an "Eliminating company" for which intercompany turnovers will be presented in the "Consolidated trial balance". To select an company list in the extended report mode, go to the "Consolidation under IFRS" subsystem and click Reports – Consolidated trial balance. Set filters in the field.

Specify an company In the list.

Specify an accounting register in Posting journal (bookkeeping and tax accounting).

To select companies, click Select.

In the Business units catalog, double-click the companies. They are automatically added to the "Companies" dataset.

In the company list, specify Eliminating company to record the company's intercompany turnovers excluded when you prepare consolidated statements based on the NAS data.

The system determines the company perimeter according to the report period and scenario. In "Reporting period management" of the "Budgeting, reporting, and analysis" subsystem, specify Regulation for preparing reports.

In "Regulation for preparing reports", specify the perimeter.

IFRS principles

Stick to the following IFRS principles to consolidate subsidiaries that are used to generate these financial statements:

Sum up balance and turnovers for all specified companies defined in the perimeter.

Exclude intercompany balance and turnovers, including unrealized gains/losses excluded after intercompany turnovers are eliminated.

Close inventory and cost accounts.

Note that this consolidation option is a simplified version of the NAS data consolidation in compliance with the above IFRS principles. However, it does not record additional adjustments for consolidated companies as the NAS data is consolidated. If you need to make several adjustments, you can record them on the NAS GL accounts at the level of "Eliminating company" using the Manually entered transactions document. To access it, go to Transactions – Bookkeeping.

Generating consolidated trial balance

To generate consolidated financial statements in accordance with the IFRS principles based on the NAS data, follow the steps:

Account for the company business transactions under NAS.

Close the company's cost accounts under NAS using the Closing inventory, NCA, and cost accounts document if custom account closing is required.

Close the company's GL accounts for the month under NAS using the Month-end closing data processor.

Eliminate intercompany transactions under NAS for the "Eliminating company".

Close GL accounts under NAS for the "Eliminating company".

For more information about each step, see below:

Record the company's financial transactions under NAS accounting for all accounting areas.

Close the company's costs under NAS considering the features of closing accounts in the company (if any). To do it, go to IFRS accounting – Period-end closing and use the Closing inventory, NCA, and cost accounts document. To recalculate the closing of the company's inventory and cost accounts for NAS data, in the Company field, select the company and fill the Cost account closing settings document. Specify Accounting register – Self-financing.

The Closing inventory, NCA, and cost accounts document calculates the cost of an inventory unit including the average cost of a unit write-off based on quantitative inventory accounting: opening balance of work in progress, actual production costs in the current reporting period, and balance of work in progress set at the end of the reporting period and specified in the Physical inventory count of work in progress document.

For accounting data, the inventory unit cost is written off from NAS accounts and at the company level, at the average unit price according to the specified "IFRS cost account closing settings" based on quantitative accounting of inventory flow.

The Cost calculation document creates entries that write off expense valuation differences from the source accounts to the destination accounts specified in the IFRS cost account closing settings document. If accounts or dimensions are not specified, the defaults are used. Based on the calculation, the Cost calculation document allocates the expenses to the cost.

In the Number of iterations field, you can set the required number of cost allocation iterations. In the Calculation accuracy limit field, you can specify a calculation accuracy degree.

You can also apply the IFRS cost account closing settings to multi-stage production. You can specify the number of process stage calculation in the Maximum closing iterations window.

To detail the "IFRS cost account closing settings" to be created, specify the company, scenario, period, cost accumulation and recognition accounts, and allocation rule in the document command bar. If there are no filled parameters, the created setting will be applied to all companies listed in the "Regulation for preparing reports" for all cost accounts with the Proportional to the translated turnover of the NAS Dr closing account Cr closing cost account rule. Specify a cost account to whose debit the amounts of all specified credit cost accounts will be allocated.

The IFRS cost account closing settings have the following rules:

Proportional to the translated turnover of the NAS Dr closing account Cr closing cost account

Proportional to the translated turnover of the NAS Dr closing account

Proportional to the allocation table shares

Proportional to the shares received by an arbitrary query

To close an account in proportion to closing of the NAS cost source account, use the Proportional to the translated turnover of the NAS Dr closing account Cr closing cost account rule. Additional costs of this account created by NAS accounting objects will be recognized in proportion to the cost recognition in the NAS source account.

To close an account in proportion to recognition of all recognized NAS costs, use the Proportional to the translated turnover of the NAS Dr closing account rule. Additional costs of this account created by NAS accounting objects will be recognized in proportion to the earlier cost recognition in NAS.

For NAS, you can follow the above rules to set up and close inventory, cost, and NCA accounts in a specific way used in the company considering the specifics of its production process and cost accounting, even in multi-stage production.

To set cost allocation shares using a table, use the Proportional to the allocation table shares rule. You can break down this setting by all possible dimensions on the cost GL account.

To determine cost allocation shares using an arbitrary query to the accounting system data, use the Proportional to shares received by an arbitrary query rule.

If you select the Write off translated costs check box, the balance on the cost GL accounts (20, 23, 25, 26, 44) will be completely written off to the expenses of the current period by closing the accounts.

Close the period under NAS for the relevant company using the Month-end closing document.

Eliminate intercompany business transactions under NAS for the "Eliminating company". To do this, in the "Consolidation under IFRS" subsystem, go to the Reconciliation and elimination by entries section and create the Elimination of intercompany turnovers document. In the Accounting register field, specify Self-financing. In the Eliminating company field, select Eliminating company.

Within the elimination, entries are made to eliminate intercompany turnovers and unrealized gains/losses for assets using negative posting:

Eliminate accruals for the receipt of goods, works, and services from intercompany counterparties (VAT inclusive).

Restore the cost write-off of goods, works, and services sold to intercompany counterparties.

Eliminate revenue from sales of goods, works, and services to intercompany counterparties (VAT inclusive).

If necessary, you can reconcile intercompany turnovers using the Intercompany reconciliation by entries document.

Close GL accounts under NAS for the "Eliminating company" using the Closing inventory, NCA, and cost accounts document. In the Company field, specify Eliminating company. In the Accounting register field, select Self-financing. Do not post the Closing inventory, NCA, and cost accounts document again. Based on the results of the elimination of intercompany turnovers, the Closing inventory, NCA, and cost accounts document makes the following adjustments on NAS accounts for the "Eliminating company":

Costs of inventory transferred to production on cost GL accounts in correspondence with inventory GL accounts. Use negative posting if necessary.

Costs of the release of finished products on GL accounts of the finished product release in correspondence with cost GL accounts. Use negative posting if necessary.

Costs of inventory accounting on product cost GL accounts in correspondence with cost GL accounts. Use negative posting if necessary.

To get the results of NAS data consolidation, generate the main Consolidated trial balance report that lists consolidated companies and "Eliminating company".

Reports
Preparing consolidated data

The Consolidated trial balance document is the main report used for consolidated data preparation based on NAS and the specified IFRS principles.

To access the Consolidated trial balance document, in the "Consolidation under IFRS" subsystem, go to the Reports section. In addition to the main document parameters, to generate a report:

In the Company field, specify the In the list filter.

In the Accounting register field, specify Posting journal (bookkeeping and tax accounting).

Reconciling intercompany turnovers

To reconcile intercompany turnovers for several companies based on NAS data at once, use the Intercompany reconciliation by entries document. To do this, go to "Consolidation under IFRS" – Reconciliation and elimination by entries and open the Intercompany reconciliation by entries document. Here specify the required data.

Reconciliation period

Chart of accounts – Self-financing

Business unit

Business units to reconcile

In the Business unit field, specify the same companies as in the Business units to reconcile field.

The Regulation field is optional.

The report shows reconciliation of NAS accounting data of the company specified in the Business unit list with the data of the company specified in the Business unit to reconcile field.

The Intercompany reconciliation by entries report presents the total amount of discrepancies for each pair of companies to reconcile in the Discrepancy column by the Balance and Turnovers row.

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