ALERT: The New Accounting Standards and Procedures in Russia

October 08, 2001

On September 27, 2001 the Russian Government approved a new strategy for banking and accounting reforms.  According to officials of the Russian Central bank, the country will completely switch to international accounting and auditing standards and procedures on January 1, 2004.  The current accounting system is somewhat different from western standards and many foreigners have had difficulties understanding balance sheets, accounting and tax reports.  Currently, major Russian companies, dealing internationally, keep their book and records in two different systems, one set in accordance with current Russian regulations and one set in accordance with international standards, so that foreign partners can easily comprehend officials reports by referring to western-standardized documentations.

As it is expected, the accounting reform will be implemented slowly and will be applied in Russian commercial banks, first.  Within next three years it will be necessary for thousands of specialists, including lawyers, accountants, auditors and tax inspectors to be re-educated and trained in the new system of accounting.

Yevgeniy Tregubenko
Associate, Haynes and Boone, LLP
(Licensed only in New York and Russia)

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