Preparation of financial statements in accordance with IFRS
Preparation of financial statements in accordance with IFRS (International Financial Reporting Standards) is most often required if an organization is engaged in conducting international business. The transformation of accounting statements from local standards to IFRS is necessary to simplify the consolidation of accounting documents of the holding or partners located in different countries.
Documentation on international standards is developed independently by the organization (or outsourcers), or an interested person provides a form to fill in. An investor who wants to invest in your business, a parent and subsidiary company, or a partner company can act as an interested person.
Our “Daxiko Company” provides all types of accounting outsourcing services throughout Kazakhstan, including preparation of IFRS financial statements:
- IFRS audits;
- Preparation of financial statements of the organization according to international standards.
Features of accounting for income and expenses under IFRS
Documents developed in accordance with international formats contain a more detailed explanation of the income, expenses, funds of the organization and sources of receipt of these funds. Among other things, IFRS dictate slightly different principles of accounting for expenses and income.
Accounting statements according to Kazakh standards are more based on the accrual method, regardless of cash flow. That is, you have not paid the money yet, but you already have to account for it in expenses. Or the opposite situation, when the funds have not yet been credited to your account, but the income already needs to be indicated.
In turn, international standards are more closely related to the actual income received or expenses incurred. This means that funds are accounted for in the period when they were written off or received by the enterprise.
Principles of IFRS reporting
In the process of developing documentation according to international standards, we adhere to principles based on the requirements for the quality of information and its reflection in accounting, that is:
- The information must be reliable, with accurate indicators of the economic activity of the organization;
- All data should be comparable for different accounting periods and with other enterprises;
- Income and expenses must be accounted for in the period in which they occurred.
All accounting documents are compiled on the basis that the client does not plan to terminate the activities of his organization in the near future.
Transformation of accounting statements into IFRS
In order for the transformation of accounting documents into an international format to be as successful as possible, you need to know the basic principles of reporting well and correctly determine the requirements of the interested person, namely for what purposes he will use the data obtained. The work on the transformation of financial documents in our company is divided into the following stages:
- Collecting basic information about the client’s company, including subsidiaries;
- Analysis of operations to be transformed;
- Making adjustments when accounting errors are detected according to Kazakh standards;
- Making calculations and making accounting entries for the transition to the international chart of accounts;
- Preparation of the Balance Sheet and Income Statement in the form of IFRS;
- Formation of a Statement of cash flows and changes in equity;
- Data transfer to a foreign currency;
- Filling in the relevant lines in the reporting forms;
- Sending a complete package of finished documentation to the client.
For many years now, we have been providing a full range of services for the translation of regulated financial statements into an international format. Therefore, we know in practice that the process of preparing accounting documents is quite time-consuming, including many nuances.
Therefore, if you or your employees do not have experience working with international standards, have difficulties in compiling consolidated reports and do not have sufficient knowledge in this area, the specialists of Daxiko Company will do everything for you! We will save you time and save you from worries. The professionals of Daxiko Company will provide qualified assistance on time, carefully and efficiently bringing the entire documentation preparation procedure to a result