Period-end closing procedures

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Period-end closing under the transformational model

When you use the transformational model, trial balance under NAS is translated in full. Some accounts of trial balance under NAS are used only for technical purposes of period-end closing. When you transform them into IFRS reporting, do not consider them. So, the period-end closing procedures that must be run for the trial balance under IFRS are performed separately from the period-end closing procedures under NAS.

For example, for transformation, you do not need to translate NAS 99.01 “Profits and losses from economic activities (excluding corporate profit tax)” account as it generates the financial result of NAS, and not IFRS.

Also, when you transform the initial data while working with commercial and administrative costs, 26 “General business expenses” and 44 “Sale expenses” expense accounts are used. The dimension is conducted by cost items, and not 90.08 “Administrative expenses” and 90.07 “Sale expenses” accounts, to which in these expenses are apportioned under NAS. In IFRS chart of accounts such accounts for closing expenses are not provided. It is enough to have accounts of the initial period expense accounting. To control the integrity of trial balance data under NAS, translate all data. The accounts that you do not need to use during transformation can be translated to special technical accounts, as presented in the application demo base.

Revenue in the trial balance under IFRS is recorded VAT exclusive. You can use separate account 90.03 "Value added tax" to account for revenue VAT under NAS. When it is translated, it should reduce the revenue debit turnover. You can also adjust it manually if this account is translated to a technical account.

According to the adjustment results for IFRS accounting, in the transformational model, trial balance under IFRS is not completely “closed”. To prepare reporting, there is no such need as the trial balance under IFRS will be generated with new data in the next reporting period. The trial balance stored in the previous period does not affect it. So, period-end closing procedures in the transformational model are run with fewer options.

For example, you need to calculate the profit (loss) under IFRS.

Calculate the financial result outside the application. To record the calculated amount, use the Transformational adjustment document.

The IFRS cost and deferred taxes are also calculated. You can find below how they are calculated.

When you generate reporting or run period-end closing under the transformational model, note that all reversal entries and adjustment accrual under IFRS are performed only for the debit turnover of asset accounts and credit turnover of liability accounts.

For example, credit turnover of 90.01 “Revenue” account translated from NAS represent the revenue amount recorded in reporting under NAS. When you make adjustments under IFRS, the revenue measurement of specific transactions may change, some revenue recognition amounts may be reversed. When you prepare the "Consolidated statement of income" form and the revenue notes, the formulas will refer to the credit turnover of this account. Also, when you calculate the financial result under IFRS, the account's credit turnovers are specified in the formula. So, you can reflect all revenue adjustments via credit turnover by adjusting the increase/decrease in revenue amounts by positive/negative amounts.

Transactions automated in the "IFRS accounting" subsystem make entries for IFRS amount accrual/reversal in the same entries by editing their figures if necessary. NAS data recorded by debit turnovers on liability accounts and credit turnovers on asset accounts are reversed with exactly the same entries but with the opposite sign.

Posting of previous period adjustments (transformational model)

When you prepare reports in each subsequent period under the transformational model, the opening balance of the IFRS retained profit account does not account for adjustments from previous periods that had an effect on the IFRS retained profit balance. As a result, the IFRS comprehensive income account balance at the beginning of the period does not match the previous year's "Statement of financial position". The same occurs when making adjustments to the eliminating company upon consolidation.

So, when you prepare the transformation at the individual level or consolidate the eliminating company, repeat IFRS adjustments made in previous periods and affecting the comprehensive income report accounts (profit and loss statement) or the accounts in the Equity section of the "Statement of financial position" (hereinafter referred to as balance).

Algorithm of repeating previous period adjustments

So, repetition in all subsequent reporting periods is required for all adjustments that change the measurement of assets or liabilities or for adjustments that transfer amounts from the "Statement of financial position" to the "Profit and loss statement", which are called reclassification adjustments. These adjustments affect capital items or other comprehensive income items.

Adjustments that do not require repetition in all subsequent reporting periods are only transactions whose measurement amount under NAS is not changed for IFRS. These adjustments are called reclassification adjustments. They do not affect capital items or other comprehensive income items.

When reclassified, the transaction amount is transferred to another account or dimension. For example, transfer of expenses from cost of sales to administrative expenses, from deferred expenses to intangible assets or period expenses, and so on.

The system selects adjustments of previous years for repetition as follows.

The application analyzes the account correspondence in the adjustments of previous years and selects all entries where the "Profit and loss statement" accounts correspond to the "Statement of financial position" accounts for repetition.

Upon default repetition, the “Profit and loss statement” accounts indicated in previous periods are replaced with account 5.5.00.84.02 "Retained profit/unrecovered loss of previous periods". If the adjustment affects not the IFRS retained profit but another item of other comprehensive income or capital, manually replace the IFRS retained profit account in the adjustment repetition.

In the application, you can add some adjustments to the repetition or remove them.

Once repeated, the restored adjustments are included in the trial balance under IFRS, where they are recorded in the Opening debit balance and Opening credit balance columns at the same time.

Repeating entries in the NCA subsystem

With the IFRS subsystem, you can prepare financial statements under IFRS using both transformational and transactional models. Each of the models has its own features.

Firstly, the IFRS subsystem does not continuously account for objects. It happens as there is no need to keep such continuous accounting of all other objects. The labor costs for such accounting may exceed the benefits of its results.

The NCA subsystem allows you to keep continuous (parallel) accounting of NCA objects. Only in the NCA subsystem, you can store all events of NCA objects and record them separately from NAS both under the transformational and transactional models.

Under the transformational model, data for each new reporting period is translated from NAS as balance and turnovers to trial balance under IFRS or to trial balance and do not automatically reproduce the results of parallel accounting of NCA objects in previous periods.

As a result, you need to repeat not only adjustments that follow the usual algorithm for repeating adjustments of previous years, but also adjustments that did not affect the financial result in previous periods but resulted from reclassifications of continuous accounting of NCA objects between asset accounts.

This is a fundamental difference from accounting of transactions with other assets, such as accounts receivable. For example, under IFRS, impaired receivables are accrued on the balance received of accounts receivable received from NAS each reporting period. Continuous accounting of the reserve is not supported.

In the NCA subsystem, when you keep continuous item-by-item accounting, repeat reclassifications between NCA groups and NCA GL accounts.

For example, if an object is accounted for under NAS as a part of construction in progress and it is a fixed asset in commission under IFRS, repeat the reclassification of the NAS CIP object into the IFRS fixed asset every reporting period. NAS balance will be included in the trial balance under IFRS without the reclassification made in the previous period.

The reclassification is also repeated for other NCA groups. As a result of repeated reclassifications between NCA groups, an NCA group at the beginning of the reporting period under IFRS must match a group at the end of the previous period.

Similar repetitions are made for reclassifications when you use a technical GL account of the construction in progress (CIP) to organize item-by-item NCA accounting under IFRS.

When an object is recognized under IFRS, data is received from NAS to the IFRS subsystem account with quantitative NCA accounting. This account is an unclassified GL account of investments in non-current assets.

The NCA receipt document makes an entry that reclassifies an object from an unclassified account to a classified GL account of investments in NCA, that is, to an account with item-by-item NCA accounting.

You also need to repeat such entries in subsequent periods if the object still remains on the NCA investment account. In trial balance under IFRS, after translation, these objects are recorded in the unclassified GL account of investments in NCA, and the repetition transfers the investment cost to the IFRS NCA objects.

Under the transformational model, the NCA subsystem automatically repeats the adjustments reviewed above using the Period closing operation by NCA document.

Under the transactional model, you do not need to repeat them since the previously recorded IFRS accounting data is stored in registers and does not change when new transactions are translated from NAS.

Tool for previous period adjustment repetition

To repeat the adjustments of previous periods, take advantage of a special tool that helps you select the necessary transactions for their repetition:

1. The Posting of previous period adjustments document. To display the entire list of entries for repetition in the document table, click Fill in.

If you do not want to repeat some entries, select the Exclude from repetition check box for each of them. You can also add entries to be repeated if they do not follow the standard algorithm. To add entries to repetition manually, click Select entries.

1. In the Settings of previous period adjustment repetition catalog, specify the correspondence of the accounts to be added to entry repetition for each company if necessary.

For example, when you migrate to the application, enter the NCA balance at the beginning of the reporting period. For example, when you enter accumulated depreciation in the measurement under IFRS, the following entries are made for each NCA object: Dr 7.1.00.00.01 "Opening balances" Cr 2.3.01.02.02 "Fixed assets: depreciation".

Create as many entries as there are NCA in accounting under IFRS. Repeat these opening balance entry adjustments under IFRS in each subsequent reporting period to record NCA objects in the IFRS measurement. These entries will not be selected upon automatic filtering since they do not contain the "Profit and loss statement" accounts.

In order not to enter numerous adjustments manually, create the Settings of previous period adjustment repetition catalog item. In this item, click Add to specify the correspondence to be selected for the business unit. Once you save this setting, all entries that have this correspondence will be automatically included in the Posting of previous period adjustments document.

1. With enumerations in the Transformational adjustment document, you can specify an action to perform in subsequent periods when repeating previous period adjustments right at the time of the adjustment under IFRS.

In the Action enumeration in the next period, select Do not use, Reverse, or Repeat.

Do not use means that the entry falls under the regular adjustment repetition algorithm. Apply Reverse if you need to reverse an entry in the next period regardless of whether it falls under the regular adjustment repetition algorithm.

Use Repeat if the entry does not fall under the regular adjustment repetition algorithm but still must be repeated.

The "Repeat" action helps to consider adjustments that you would have to manually add to the Posting of previous period adjustments document in the next reporting period. If you select this action, these adjustments will be automatically added to the document when it is filled.

Calculating operational expenses for a period

Estimated expenses for a period in accounting under IFRS may differ from estimated expenses under NAS, for example, due to a difference in NCA depreciation amounts, accrued income and expenses, inventory provisions, and account receivables. In this case, in the IFRS subsystem, you can separately calculate expense write-off amounts for the period to financial result GL accounts or other accounts in an measurement adjusted for accounting under IFRS.

The main approach proposed in the system is to translate the expense amounts for ordinary NAS activity types to IFRS cost GL accounts after their allocation between activity types and generation of the full (truncated) cost of product, works, and services under NAS, and to include the difference in measurements of period expenses under NAS and IFRS in IFRS cost items on period-end closing under IFRS.

Under IFRS (IAS) 1 "Presentation of Financial Statements", operating expenses can be presented as expenses by nature or expenses by function.

"Expenses by nature" presentation matches the cost item classification adopted in accounting practice since it drills down expenses recorded in the debit of cost GL accounts during the reporting period before allocation between types of products, works, and services.

"Expenses by nature" presentation drills down the period costs by cost items and indicates changes in the balance of work in progress and finished products in stock. The indicators of financial and other costs are also drilled down. Under IFRS (IAS) 1, if a company records expenses by function, it must still present information about the nature of period costs in a separate note.

When you set up how to translate NAS expenses and allocate differences in the IFRS expense measurement, note that indicators of the cost of sales, selling and administrative expenses in items in cost item expenses are not selected separately because they are an alternative classification of the period expenses by function.

Example of classifying company expenses by nature of expenses under IFRS

The company provides the following classification of period expenses by their nature in its IFRS accounting policy:

• Raw materials, materials, and spare parts.
• Employee remunerations.
• Non-current asset depreciation and impairment expenses.
• Transportation expenses.
• Advertising expenses.
• Operating lease expenses.
• Other expenses.

Total operating expenses, including sales cost, selling and administrative expenses

When operating period expenses are presented by function, indicators of the cost of sales, selling and administrative expenses, financial and other expenses are generated.

These indicators can be drilled down by cost items and product range groups.

This approach to the expense presentation matches the period expense classification by cost items adopted in accounting practice. Besides, in the "Profit and loss statement" format, indicators of the cost of sales, selling and administrative expenses, financial and other expenses must be drilled down.

These indicators are not available during the reporting period and are generated only upon period end-closing once general (overhead) expenses are allocated between types of products, works, and services.

To generate expense indicators under IFRS, a company develops the accounting principles of period expense accounting. To set up how to generate operating, financial, and other expenses, use the Period-end closing settings section registers.

Accounting for period expenses under IFRS

Accounting for expenses under IFRS based on data received from NAS and manual entries for expenses entered under IFRS.

The application implements the following model to account for expenses under IFRS, where the standard NAS chart of accounts and the IFRS chart of accounts are used:

1. Period expense amount is translated from NAS accounts to IFRS accounts in accordance with the Translation document settings.

As a rule, transactions (balance and turnovers) of NAS cost GL accounts (20th and 40th NAS accounts) are translated to balance GL accounts of expenses or inventory under IFRS. For example, GL accounts of expenses of the main and auxiliary production, general business, production, and selling expenses.

In turn, transactions (balance and turnovers) of the 90th NAS accounts, which record expenses for ordinary NAS activity types, are translated to cost generation accounts of the "Profit and loss statement" under IFRS.

We recommend that you translate entries for NAS expense generation and write-off to the GL accounts of the cost of sales, selling, administrative, financial and other expenses, except for entries that recognize the "primary costs" with an NAS measurement that differs from the IFRS measurement.

To calculate the amount of operating expenses of the period, the following system documents are used:

• □ Cost calculation.
• □ Profit (loss) calculation.

The Cost calculation document creates entries that write off differences in the expense measurement from the source accounts to the destination accounts specified in the Cost allocation settings form.

1. Cost calculation closes accounts of the "Work in progress (WIP)" or "Inventory" category. Accounts of the "Work in progress" category are closed based on the Cost allocation settings form parameters. Inventory GL accounts are closed in proportion to the number of written off inventory.
2. "Closing" means writing off the amounts of amendments to IFRS allocated to these accounts by the IFRS subsystem documents and transactions. The amounts transferred from NAS are not closed. The system implements circular cost allocation, when one account is closed to another one, and the second account is then partially closed to the original source account. To process such transactions, use the "number of iterations" indicator in the closing operation settings.
3. The "Profit (loss) calculation" document closes accounts of the "Cost", "Selling and administrative expenses", and "Other income and expenses" categories to the financial result generation account.
4. The system drills down expenses by cost items using the Cost calculation document. Once the document is posted, the cost item dimension is transferred from the accounts of the "Work in progress (WIP)" category to the profit and loss statement accounts according to the cost allocation settings and in proportion to each cost item share allocated to profit and loss.

To drill down operating expenses by cost items of the IFRS chart of accounts, the following subaccounts are created in the system for account 6.2.02.90.00 "Cost of goods and services produced":

• □ 6.2.02.90.01 "Cost (total)".
• □ 6.2.02.90.02 "Cost (by items)".
• □ 6.2.02.90.03 "Cost (change in inventory balance)".
• □ 6.2.02.90.02 "Cost (profit and loss reclassification)".

On account 6.2.02.90.01 "Cost (total)", the amount of operating expenses for the period is measurement in the IFRS measurement. NAS transactions are first transferred from the 90th accounts (for example, account 90.02 "Cost of sales") to the debit of this account.

Next, the Cost calculation document makes the following entries:

Dr 6.2.02.90.01 "Cost (total)" (without dimension).

Cr "Adjustment cost GL accounts" (without dimension).

As a result, on account 6.2.02.90.01, the total amount of operating expenses for the period is generated in the IFRS measurement without a dimension.

Setting up accounting policies and accounting parameters

To include differences in cost estimates under NAS and IFRS in operating and other expenses, set the rules for allocating adjustments between expense kinds.

A company develops a methodology of NAS cost generation. The basic principles of this methodology are the definition of the list of cost items and their classification into direct and indirect ones. For indirect cost items, the principles of allocation for kinds of activities, products, works and services are established in accordance with the selected allocation bases.

Based on the principles of this methodology and the specifics of the presentation of period expenses under IFRS, we recommend that you develop a procedure for allocating the cost adjustment amounts between types of activities, products, works, and services in such a way that after the adjustment amounts are allocated to the IFRS expense GL accounts, the amounts in the IFRS measurement are generated and then are written off to the "Profit and loss statement" accounts.

Based on this procedure, a scheme for allocating cost adjustments between calculation objects is set in the Cost allocation settings information register.

To copy settings of one period to another, in the document, click Copy settings on the command bar.

Create Cost account closing settings to recognize amounts translated from NAS and amounts generated by parallel accounting objects under IFRS in the costs of the current period.

To break down the setting 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 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 allocate amounts of all cost accounts to its Dr.

To create proportions of cost allocation to period costs on the cost accounts, use 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 IFRS 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 transferred NAS costs, use the Proportional to the translated turnover of the NAS Dr closing account rule. Additional costs of this account created by IFRS accounting objects will be recognized in proportion to cost recognition under NAS.

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.

Account categories for cost calculation

You can set an account category for each account in the IFRS chart of accounts. To do this, in the IFRS chart of accounts, open the account settings window and select the category from the catalog.

Use "Work in progress (WIP)" accounts to calculate the cost and allocate costs. When you set this category for an account, the standard solution selects debit turnovers of this account broken down by items for their subsequent allocation to the destination account specified in the "Cost allocation settings".

Use this setting for all accounts that have balance at the reporting date. This will allow the application to determine the amounts for entries to generate differences in IFRS and NAS cost measurements, which are selected broken down by dimension.

Accounting documents

To allocate production costs, click IFRS closing operations and enter documents.

Cost calculation document

To allocate costs to the cost, use the Cost calculation document.

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.

On posting, the document generates entries for allocation of differences in production cost measurements to the cost.

The entries allocate the costs from one cost node to the next node according to the allocation settings.

When you post the document, entries are also generated to drill down the cost by cost items.

To drill down the cost, generate an entry that drills down the primary cost by items based on the amounts of the debit turnovers of their GL accounts in correspondence with the total cost account:

Dr 6.2.02.90.02 "Cost (by items)".

Cr 6.2.02.90.01 "Cost (total)".

Reclassifying nominal accounts

To correctly present reporting under IFRS, present assets and liabilities in detail. For some items, you can present information with a net book value.

In most cases, you must record balances translated from nominal NAS accounts in the IFRS chart of accounts in detail.

The Nominal account reclassification document restores collapsed NAS balances. To create this document upon period-end closing, click IFRS closing operations.

Entries with correspondences are translated from NAS. So, the balances generated in accounting under NAS and in the accounting registers on the accounts are the same. For example, when you translate transactions of account 76 "AR/AP accounting with different debtors and creditors", you can generate its balance in debit or credit, since this account is nominal under NAS.

To present the debit balance in the asset account and the credit balance in the liability account of the IFRS chart of accounts, reclassify the nominal account.

Reclassification in the standard solution

The standard solution implements the following method:

• In the IFRS chart of accounts, each nominal NAS account must correspond to the asset account and the liability account.
• Set up translation rules for each nominal NAS account so that all entries are translated either to an asset account or a liability account under IFRS. The account is selected depending on its purpose and economic substance.
• When reclassification starts, the application verifies whether the IFRS account balance is correct. If an asset account under IFRS has credit balance, the application automatically transfers this balance to a liability account. If a liability account under IFRS has debit balance, the application transfers it to an asset account.

Example

How the NAS data is translated to the IFRS accounts:

NAS accounts	Translation	IFRS accounts
76.05 "AR/AP accounting with different suppliers and contractors" (nominal account)	+	3.3.07.76.01 "Other short-term accounts payable" (liability account)
	Account for reclassification	1.3.02.76.01 "Other short-term accounts receivable" (asset account)
76.06 "AR/AP accounting with other customers" (nominal account)	+	1.3.02.76.01 "Other short-term accounts receivable" (asset account)
	Account for reclassification	3.3.07.76.01 "Other short-term accounts payable" (liability account)

A company translated the following transactions to IFRS accounts:

#	Transaction	NAS		IFRS		Amount
		Dr	Cr	Dr	Cr
1	Income accrual	76.06	91.01	1.3.02.76.01	6.4.00.91.3	1,000
2	Payment received	51	76.06	1.1.03.51.01	1.3.02.76.1	1,300
3	Expense accrual	20.01	76.05	1.4.02.20.01	3.3.07.76.1	1,000
4	Paid	76.05	51	3.3.07.76.01	1.1.03.51.1	1,400

After the translation, on IFRS asset account 1.3.02.76.01 "Other short-term accounts receivable", credit balance of 300 rubles (1,000 - 1,300) was generated. On liability account 3.3.07.76.01 "Other short-term accounts payable", debit balance of 400 rubles (1,000 - 1,400) was generated.

With the Nominal account reclassification document, you can make the following adjustments:

#	Transaction	IFRS
		Dr	Cr	Amount
5	Nominal account adjustment	1.3.02.76.01	3.3.07.76.01	300
6	Nominal account adjustment	1.3.02.76.01	3.3.07.76.01	400

These entries are automatically reversed on the first day of the month following the reporting period:

#	Transaction	IFRS
		Dr	Cr	Amount
7	Nominal account adjustment	1.3.02.76.01	3.3.07.76.01	-300
8	Nominal account adjustment	1.3.02.76.01	3.3.07.76.01	-400

Use the method mentioned above to reclassify nominal accounts broken down by all dimensions (non-current extra dimensions).

Setting up reclassification accounting parameters

Specify the settings in the Active-passive accounts reclassification settings information register.

Create a register for each IFRS account to which the balance of a nominal NAS account is translated. In the Main account (translation) field, specify an account to verify for reclassification. In the Reclassification account field, specify an adjustment account to which the balance of the account to verify will be transferred by the entry.

Nominal account reclassification document

To reclassify nominal accounts, use the Nominal account reclassification document.

Fill the Report period and Company fields. To create a document with nominal account reclassification entries, click Post.

Revaluating currency assets and liabilities

Closing rate. Current exchange rate at the end of an reporting period.

Monetary items. Available cash and assets and liabilities to receive or pay. They are expressed in a fixed or a determined quantity of currency units.

Foreign currency. Currency that differs from the functional currency of the company. In the system, a foreign currency for the company is an account currency, which differs from the functional currency, and a source currency upon translation if it differs from the functional currency.

Functional currency. Currency used in the main economic environment where the company operates. It is specified as an Accounting currency in the company IFRS accounting policy.

Presentation currency. Currency used to present financial statements. It is specified as an Additional accounting currency in the company IFRS accounting policy.

To revalue foreign currency accounts under IFRS:

• Translate monetary accounts in a foreign currency at the period-end closing rate.
• Translate non-monetary accounts that are measured at historical cost in a foreign currency at the exchange rate at the transaction date. You cannot revalue them upon period-end closing. For such accounts, adjust write-offs according to the receipt prices.
• Translate non-monetary items that are measured at fair value in a foreign currency at the exchange rate as of the fair value measurement date. You can revalue them only as of the measurement date at fair value. For such accounts, also adjust write-offs according to the receipt prices.

A monetary item gives a right to receive (or an obligation to provide) a fixed or determinable cash amount. Monetary items include pensions, other employee remunerations to pay in cash, provisions to repay in cash, and dividends that must be paid in cash and are recognized as liabilities.

A non-monetary item doesn't give the right to receive or the liability to provide a fixed or measurable cash amount. Non-monetary items include: advance payments for goods and services (for example rent prepayment), goodwill, intangible assets, inventory, fixed assets, and estimated liabilities that are paid by providing a non-monetary asset.

Once the accounting data in the functional currency is received, it is converted from the functional currency to the presentation currency if the presentation currency does not match the functional currency. Assets and liabilities are adjusted at the exchange rate at the end of the period. Income and expense accounts and other comprehensive income accounts are translated at the exchange rates at the transaction dates. For transactional accounting, they are not adjusted. For transformational adjustments, an average rate for the IFRS period is used.

To record adjustments in the functional currency and the presentation currency, use the Revaluation of currency assets and liabilities document. To access the document, go to IFRS accounting – IFRS closing operations.

Revalue the generated balance on currency monetary accounts at each reporting date. Within period-end closing, you can calculate exchange rate differences in accounting under IFRS and accounting under NAS separately. It allows you to avoid translating entries of currency debt revaluation. These entries are generated as of each day of debt repayment. It also allows you to determine realized exchange rate differences required to prepare a cash flow report indirectly.

Revaluation in the standard solution

Accounts with the Recalculation to functional currency attribute are revalued in the functional currency:

• Monetary accounts. Account balances are adjusted at the exchange rate at the end of the period. The functional currency exchange rate from the source currency is determined by the exchange rate register.
• Non-monetary, historical cost. Account write-offs are adjusted according to the NAS write-off percentage. The percentage is determined by the NAS quantity or share.
• Non-monetary, fair value. Account write-offs are adjusted according to the NAS write-off percentage. The percentage is determined by the NAS quantity or share.
• Not recalculated. Adjustment is not made. It can be used, for example, for exceptional adjustments of exchange rates made by other tools.

Formula for balance adjustment amount in the functional currency for monetary accounts:

AdjustmentFunctionalCurrency = BalanceForeignCurrency * FunctionalCurrencyExchangeRate - BalanceFunctionalCurrency

Where

AdjustmentFunctionalCurrency. Adjustment amount for the functional account balance currency broken down by non-current extra dimensions at the period end date in correspondence with the profit or loss account from the settings of exchange rate difference calculation.

BalanceForeignCurrency. Balance in a foreign currency. The balance in a foreign currency is obtained from the currency balance for monetary currency accounts and the balance in the presentation currency if the presentation currency matches the source currency. In other cases, it is obtained from NAS balance and only translated transactions are revalued.

FunctionalCurrencyExchangeRate. Functional currency exchange rate in a foreign currency: how many foreign currency units one functional currency unit costs.
BalanceFunctionalCurrency. Balance in a functional currency.

According to the IFRS accounting policy, the closing rate can be the rate of the Central Bank or another rate.

To allocate the resulting exchange rate difference to income and expenses, follow the rules:

Exchange rate difference	Asset account	Liability account
Positive	Expense	Income
Negative	Income	Expense

If a monetary asset or liability denominated in a foreign currency is repaid, its account amount changes. NAS revaluation performed at the repayment date generates an exchange rate difference that is not translated to IFRS.

Under IFRS, at this date, only the realized exchange rate difference is calculated and allocated to the off-balance account. This is required to prepare a cash flow report indirectly. All exchange rate differences generated after revaluations on each reporting date are later reduced by the amount of realized exchange rate differences in the period. The resulting amount of unrealized exchange rate differences is used to prepare a cash flow report indirectly.

Formula for write-off adjustment amount in the functional currency for non-monetary quantitative accounts:

AdjustmentFunctionalCurrency = WriteOffPrice * Count_WriteOff - FunctionalCurrency_WriteOff

WriteOffPrice = (FunctionalCurrency_OpeningBalance + FunctionalCurrency_Receipt) / (Count_OpeningBalance – Count_Receipt)

Where

AdjustmentFunctionalCurrency. Adjustment amount by the functional currency of account write-offs broken down by all extra dimensions, a write-off account, and a corresponding account at the write-off date. Write-off for active accounts is a credit turnover. Write-off for passive accounts is a debit turnover.

WriteOffPrice. Write-off price (write-off exchange rate at historical cost).

Count_WriteOff. Quantity write-off. For example, a credit turnover on the Quantity resource for an active account.

FunctionalCurrency_WriteOff. Amount write-off in a functional currency. For example, a credit turnover on the Amount in functional currency resource for an active account.

FunctionalCurrency_OpeningBalance. Opening balance in a functional currency.

FunctionalCurrency_Receipt. Receipt in a functional currency. For example, a debit turnover on the Amount in functional currency resource for an active account.

Count_OpeningBalance. Opening balance on the Quantity resource.

Count_Receipt. Receipt on the Quantity resource. For example, a debit turnover for an active account.

Formula for write-off adjustment amount in the functional currency for non-monetary non-quantitative accounts:

AdjustmentFunctionalCurrency = WriteOffPercentage * ForeignCurrency_WriteOff - FunctionalCurrency_WriteOff

WriteOffPercentage = (FunctionalCurrency_OpeningBalance + FunctionalCurrency_Receipt) / (ForeignCurrency_OpeningBalance - ForeignCurrency_Receipt)

Where

AdjustmentFunctionalCurrency. Adjustment amount by the functional currency of account write-offs broken down by all extra dimensions, a write-off account, and a corresponding account at the write-off date. Write-off for active accounts is a credit turnover. Write-off for passive accounts is a debit turnover. If the foreign currency matches the presentation currency, all write-offs are adjusted. If the foreign currency does not match the presentation currency, only the transferred write-offs with the Translation transaction type are adjusted.

WriteOffPercentage. Write-off percentage (write-off exchange rate at historical cost).

ForeignCurrency_WriteOff. Write-off amount in a foreign currency. For example, a credit turnover for an active account.

FunctionalCurrency_WriteOff. Amount write-off in a functional currency. For example, a credit turnover for an active account.

FunctionalCurrency_OpeningBalance. Opening balance in a functional currency.

FunctionalCurrency_Receipt. Receipt in a functional currency. For example, a debit turnover on the Amount in functional currency resource for an active account.

ForeignCurrency_OpeningBalance. Opening balance in a foreign currency.

ForeignCurrency_Receipt. Receipt in a foreign currency. For example, a debit turnover for an active account.

Formula for balance adjustment in the presentation currency for the accounts with the Recalculation to presentation currency flag:

AdjustmentPresentationCurrency = BalanceFunctionalCurrency * PresentationCurrencyExchangeRate - BalancePresentationCurrency

Where

AdjustmentPresentationCurrency. Adjustment amount in an account balance presentation currency broken down by non-current extra dimensions at the period end date in correspondence with the currency translation reserve account.

BalanceFunctionalCurrency. Balance in a functional currency. The balance in the functional currency is obtained considering previous adjustments.

PresentationCurrencyExchangeRate. Presentation currency exchange rate in a functional currency: how many functional currency units one presentation currency unit costs.

BalancePresentationCurrency. Balance in a presentation currency.

Setting up accounting parameters for currency account revaluation

To revalue currency assets and liabilities automatically, set up the database accounts.

In the IFRS account form, specify Recalculation to functional currency and Recalculate to presentation currency. If the Monetary recalculation is selected, specify a setting for exchange rate difference calculation. It determines to which accounts to allocate the differences.

Under IFRS 21, most exchange rate differences are recognized in the "Profit and loss statement". However, revaluation of some items is recognized in equity. For example, revaluation of net investment in foreign operations or the effective part of a cash flow hedge.

Revaluation of currency assets and liabilities document

To generate exchange rate differences on currency accounts to revalue upon period-end closing, generate the Revaluation of currency assets and liabilities document by clicking IFRS closing operations. The document registers entries for adjusting monetary account balances, non-monetary account write-offs, and account balances to recalculate to a presentation currency.

"IFRS exchange rates changing" report

To evaluate the influence of exchange rate changes, use the IFRS exchange rates changing report. The report shows the required adjustments in a functional currency and a presentation currency and data for their calculation.

Calculating deferred corporate profit tax

Deferred corporate profit tax arises from differences in the valuation of assets and liabilities in bookkeeping and tax accounting. Under IFRS, such differences are temporary and lead to deferred taxes.

Temporary differences (TD): differences between the net book value of an asset or a liability in Statement of financial position (balance) and their tax base.

Temporary differences can be:

• Taxable temporary differences. Temporary differences that will form taxable amounts when calculating taxable profit (tax loss) in the future when a net book value of an asset or a liability is recovered or repaid. They eventually result in creation of deferred tax liabilities.
• Deductible temporary differences. Temporary differences that will result in deductions when determining taxable profit (tax loss) in the future when a net book value of an asset or a liability is recovered or repaid. They eventually result in creation of deferred tax assets.

IFRS applies the balance method of calculating deferred taxes, which consists in comparing the net book value of an asset and a liability with its tax base (the amount attributed to an asset or a liability for tax purposes).

Although there is no definition of permanent differences under IFRS 12, permanent differences arise and represent the amounts of income and expenses that do not affect the size of the tax base. Permanent differences are not used in calculating deferred taxes but affect the calculation of the effective corporate profit tax rate. You need to track these differences and account for them.

In the system, the deferred tax is calculated as follows:

1. Record the deferred tax arising from differences between NAS and tax accounting.
2. Record the deferred tax arising from differences between IFRS and NAS.

Step 1 is performed by translating NAS data and then reclassifying it for IFRS accounting. Deferred tax amounts come from NAS. No additional calculations are required in the IFRS subsystem.

To calculate tax, use the Calculation of deferred taxes document. When you translate deferred taxes from NAS, additional reclassifications are required. To reclassify deferred taxes, use the Deferred tax reclassification document. You can see the details below.

Calculating deferred taxes

The balance method for calculating deferred taxes compares all balance accounts with the resulting differences by their kind. The unit for this calculation is a balance account. To divide differences of one balance category (for example, investments) into different kinds, use different subaccounts of the IFRS chart of accounts. You'll be able to specify the required parameters of the resulting difference (permanent/temporary, taxable/deductible) in the measurement of assets/liabilities between NAS and IFRS for each subaccount. To set up balance accounts for calculating the influence of deferred tax differences, go to "Chart of accounts" or to the Period-end closing section in "IFRS settings".

The system calculates the IFRS deferred tax according to the following rules:

• To record temporary differences, use the Profit tax difference types catalog. This dimension classifies assets and liabilities into bigger classes for grouping homogeneous temporary differences. For example, several temporary difference kinds may arise for fixed assets due to different depreciation methods used in bookkeeping and tax accounting: a difference in fixed asset revaluation and a difference in fixed asset residual value. To separate one temporary difference kind from another, link the temporary difference kind to a separate balance account.
• If a permanent difference arises, create separate subaccounts in the IFRS chart of accounts. For example, interest expenses capitalized under IFRS and written off as expenses under NAS that are not accounted for in taxation. For these subaccounts, in the Profit tax difference types catalog, create separate items with the Permanent difference kind.
• The deferred tax accrued in the previous period is reversed in full. At the end of the period, the deferred tax is accrued again based on the temporary difference balance at the end of the reporting period.
• If the corporate profit tax rate is changed, adjust the amount of the previously accrued deferred tax manually.
• NAS deferred tax is either not translated or reversed in IFRS accounting.

In the system, the deferred tax under IFRS is calculated as follows:

1. If the NAS deferred tax is translated, the Deferred tax kinds NAS dimension is converted into the Deferred tax kinds IFRS dimension.

Temporary differences and deferred tax generation entries under NAS shall be translated.

1. After the translation, the deferred tax amounts are transferred to IFRS not broken down by temporary difference kinds. To drill them down by kind, post the Deferred tax reclassification document. For the reclassification scheme of deferred NAS assets and liabilities, see the "Deferred tax reclassification document" section.
2. IFRS deferred tax is calculated as follows:
   • □ Asset and liability accounts under IFRS and NAS are grouped broken down by Temporary difference kinds and Effect of difference dimensions.
   • □ Difference between the balances is calculated: [∆] = [IFRS account balance] - [NAS account balance].
   • □ For each difference, a permanent or temporary difference kind for calculating the deferred tax is determined.
   • □ For each temporary difference, a taxable or deductible temporary difference kind is determined as follows:

Balance	∆ > 0	∆ < 0
Asset	Taxable temporary difference => Deferred tax liabilities	Deductible temporary difference => Deferred tax assets
Liability	Deductible temporary difference => Deferred tax assets	Taxable temporary difference => Deferred tax liabilities

• □ Deferred tax amount is determined for each temporary difference: [ОН] = [∆] * [corporate profit tax rate]. The amounts of temporary differences and entries are generated with modulo values.
  1. Deferred tax assets/deferred tax liabilities are registered under IFRS [1]. The deferred tax is recognized either in the "Profit and loss statement" or in equity, depending on the temporary difference kind:

Dr 2.5.00.09.01 "Deferred corporate profit tax assets".

Cr 6.6.00.99.04 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (IFRS-NAS) – TEMPORARY PART".

Dr 2.5.00.09.01 "Deferred corporate profit tax assets".

Cr 5.7.00.00.01 "Deferred taxes included in equity".

and

Dr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (IFRS-NAS) – TEMPORARY PART".

Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities".

Dr 5.7.00.00.01 "Deferred taxes included in equity".

Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities".

1. The IFRS deferred tax recognized in the previous reporting period is reversed with exactly the same entries but with the opposite sign.

Setting up deferred tax calculation parameters

The main parameters for calculating and recognizing the IFRS deferred tax are:

• Profit tax difference types.
• Database accounts of assets and liabilities to which the temporary difference kind or its effect is linked.
• Profit and loss statement accounts and capital accounts for deferred tax recognition.
• Corporate profit tax rate.

Setting up profit tax difference types and database account properties

If a temporary difference arises for any asset or liability under IFRS, we recommend that you create a separate balance account in the IFRS chart of accounts to record this asset or liability separately from other items in order to correctly calculate and record the deferred tax under IFRS. You also need to divide the temporary difference by difference kind.

Then, create items in the Profit tax difference types catalog.

For each temporary difference kind, specify one of the following properties: Asset or Liability. If a temporary difference is taxable, set the Liability property. If a temporary difference is deductible, set the Asset property.

For each difference, specify the Difference kind property: Temporary or Permanent. Permanent differences are excluded from the deferred tax calculation.

In the temporary difference kind card, you can specify all database accounts to which this temporary difference kind is linked. To display a list of all accounts to which this temporary difference kind is linked, go to the AR/AP accounts section and click Find.

In the Profit and loss/equity account field, specify a database account where deferred tax profit (loss) is recognized.

Once you create temporary difference kinds, go back to the Database accounts catalog. In the Difference kind/Effect of difference field of the account card, specify the temporary difference kind for each account of the IFRS chart of accounts for which a temporary IFRS difference arises.

Corporate profit tax rate

You can specify a corporate profit tax rate in the company IFRS accounting policy.

This rate will be used to calculate deferred taxes for companies using the specified IFRS accounting policy starting from the accounting policy application date.

System documents for calculating deferred taxes

When you run period-end closing under IFRS, the Deferred tax reclassification and Calculation of deferred taxes documents are automatically generated in the IFRS closing operations menu.

Deferred tax reclassification document

Use the Deferred tax reclassification document to reclassify expenses (income) of the deferred tax recognized under NAS to IFRS 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART" account to drill down temporary difference kinds under NAS.

Example for reclassifying the deferred tax transferred from NAS:

#	Transaction	NAS	IFRS (transaction translation)	IFRS (reclassification)
1.1	Deferred tax asset recognition	Dr 09 "Deferred tax assets" Cr 68.04.2 "Corporate profit tax calculation"	Dr 2.5.00.09.01 "Deferred corporate profit tax assets" Cr 3.2.01.68.01 "Corporate profit tax payable"	Dr 2.5.00.09.01 "Deferred corporate profit tax assets" Cr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART"
1.2	Deferred tax asset repayment	Dr 68.04.2 "Corporate profit tax calculation" Cr 99.02.2 "Contingent income from corporate profit tax"	Dr 3.2.01.68.01 "Corporate profit tax payable" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 2.5.00.09.01 "Deferred corporate profit tax assets"
2	Deferred tax asset write-off upon asset (liability) disposal	Dr 99.02.2 "Contingent income from corporate profit tax" Cr 09 "Deferred tax assets"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 2.5.00.09.01 "Deferred corporate profit tax assets"	Dr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"
3.1	Accruing deferred tax liability	Dr 68.04.2 "Corporate profit tax calculation" Cr 77 "Deferred tax liabilities"	Dr 3.2.01.68.01 "Corporate profit tax payable" Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities"	Dr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART" Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities"
3.2	Record of deferred tax asset expenses	Dr 99.02.1 "Contingent corporate profit tax expense" Cr 68.04.2 "Corporate profit tax calculation"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 3.2.01.68.01 "Corporate profit tax payable"	Dr 4.4.00.77.01 "Deferred corporate profit tax liabilities" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"
4	Deferred tax liability repayment	Dr 77 "Deferred tax liabilities" Cr 99.02.1 "Contingent corporate profit tax expense"	Dr 4.4.00.77.01 "Deferred corporate tax liabilities" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART"
1.1	Deferred tax asset recognition	Dr 09 "Deferred tax assets" Cr 68.04.2 "Corporate profit tax calculation"	Dr 2.5.00.09.01 "Deferred corporate profit tax assets" Cr 3.2.01.68.01 "Corporate profit tax payable"	Dr 2.5.00.09.01 "Deferred corporate profit tax assets" Cr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART"
1.2	Deferred tax asset repayment	Dr 68.04.2 "Corporate profit tax calculation" Cr 99.02.2 "Contingent income from corporate profit tax"	Dr 3.2.01.68.01 "Corporate profit tax payable" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 2.5.00.09.01 "Deferred corporate profit tax assets"
2	Deferred tax asset write-off upon asset (liability) disposal	Dr 99.02.2 "Contingent income from corporate profit tax" Cr 09 "Deferred tax assets"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 2.5.00.09.01 "Deferred corporate profit tax assets"	Dr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"
3.1	Accruing deferred tax liability	Dr 68.04.2 "Corporate profit tax calculation" Cr 77 "Deferred tax liabilities"	Dr 3.2.01.68.01 "Corporate profit tax payable" Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities"	Dr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART" Cr 4.4.00.77.01 "Deferred corporate profit tax liabilities"
3.2	Record of deferred tax asset expenses	Dr 99.02.1 "Contingent corporate profit tax expense" Cr 68.04.2 "Corporate profit tax calculation"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 3.2.01.68.01 "Corporate profit tax payable"	Dr 4.4.00.77.01 "Deferred corporate profit tax liabilities" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"
4	Deferred tax liability repayment	Dr 77 "Deferred tax liabilities" Cr 99.02.1 "Contingent corporate profit tax expense"	Dr 4.4.00.77.01 "Deferred corporate tax liabilities" Cr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX"	Dr 6.6.00.99.01 "Current corporate profit tax, CURRENT INCOME TAX/EXPENSE TAX" Cr 6.6.00.99.02 "Deferred taxes (deferred tax liabilities/deferred tax assets), DEFERRED TAX (NAS-TAS) – TEMPORARY PART"

For the specified period and company, in the GL account of contingent corporate profit tax expense/contingent income from corporate profit tax field, specify an account to which the deferred tax expense or income is translated from NAS, that is, an account from which the reclassification will be made. In the GL account of deferred tax under NAS field, specify an account to which the reclassification will be made for IFRS. In the Deferred tax asset GL account and Deferred tax liability GL account fields, specify balance GL accounts for deferred tax assets or liabilities. In the Tax GL account field, specify a GL account for corporate profit tax.

Calculation of deferred taxes document

Use the Calculation of deferred taxes document to calculate amounts of temporary differences and deferred tax assets/deferred tax liabilities.

To fill balances of balance accounts with temporary differences for the specified period and company, click Fill in in the NAS and IFRS columns of trial balances under NAS and IFRS. The Difference column contains the calculated temporary difference as a difference between the IFRS and NAS amounts. The Deferred tax assets and Deferred tax liabilities columns display the calculated deferred tax. The Permanent tax asset and Permanent tax liability columns display permanent differences.

Upon posting, the document reverses deferred taxes under IFRS at the beginning of the period and recalculates them at the end of the period.

Closing balance sheet and calculating profit (loss)

Use the Profit (loss) calculation document to close cost accounts and recalculate costs and net profit under IFRS, including transactions additionally posted under IFRS after NAS data translation.

Use the Balance sheet closing document to close income and expense accounts of trial balance under IFRS and allocate retained profit/loss of the reporting period to the account of retained profit/loss of previous years.

The Profit (loss) calculation document closes all accounts whose account category belongs to the "Profit and loss statement" group.

Profit (loss) calculation document

The Profit (loss) calculation document is generated monthly. It calculates the financial result and records it to the corresponding trial balance account under IFRS.

For the period and company, in the GL account of the current financial result and GL account of retained profit/uncovered loss of the reporting period fields, specify GL accounts for generating entries.

To determine the entry amount, the application performs the following calculations:

1. Calculates gross margin (profit/loss):

Gross margin = Revenue - Cost.

1. Calculates operating profit/loss:

Operating profit = Gross margin - Selling and management expenses.

1. Calculates profit/loss before tax:

Profit before tax = Operating profit - Other expenses + Other income.

1. Calculates profit/loss after tax:

Profit after tax = Profit before tax - (Corporate profit tax expenses + Deferred tax accrued).

Based on the calculation results, an entry is generated for the amount of profit/loss after tax:

Dr 6.7.00.99.01 "Current financial result".

Cr 5.5.00.84.01 "Retained profit/unrecovered loss of the reporting period".

In case of loss, an entry is generated with the minus sign.

Balance sheet closing document

The Balance sheet closing document is generated before the beginning of the next reporting period. It transfers the financial result of the current period to the retained profit GL account.

For the specified period and company, in the GL account of the current financial result, GL account of retained profit/uncovered loss of the reporting period, and GL account of retained profit/uncovered loss of previous periods fields, specify GL accounts for generating entries.

When calculating the financial result and closing trial balance under IFRS, the following entires are generated:

1. Closing of all income and expense accounts to the 6.7.00.99.01 "Current financial result" account:

Dr/Cr "Income GL accounts/Expense GL accounts".

Cr/Dr 6.7.00.99.01 "Current financial result".

Entries are generated for the amount of balances on the corresponding income and expense accounts. Accounts are closed by the dimensions specified on these accounts.

1. Transfer of the current period financial result to retained profit of previous periods:

Dr 5.5.00.84.01 "Retained profit/unrecovered loss of the reporting period".

Cr 5.5.00.84.02 "Retained profit/unrecovered loss of previous periods".

In case of loss, an entry is generated with the minus sign.

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