Lyubimtseva_S_N__Koreneva_V_N_L_93_Kurs_angli

accounting records бухгалтерские счета, бухгалтерская отчетность stocktaking records книга учета запасов

accounting date отчетная дата accrual basis принцип начислений departure n (зд.) отклонение

Companies Act Закон о компаниях overriding adj первостепенный

Ex. 9. a) Supply the prepositions where necessary.

b) Explain the objective of Financial Statements and say what ensures usefulness of information disclosed in them to the users.

The objective of financial statements is to provide useful information ... users. Among the users are present and potential investors, lenders, suppliers and customers, employees, governments ... home and host countries, the public at large, and also those who act... behalf of users.

The objectives of financial statements are defined ... the needs of users. In general, information must be provided about the financial position, performance and changes ... financial position of an enterprise. Such information is useful to a wide range ... users in making decisions and is necessary to keep management accountable ... the resources entrusted ... it. Financial statements can also provide useful information to governments for making policy decisions, although governments often require specialpurpose reports as well. More specifically, a variety of users need to be able to assess the performance of an enterprise and thus are interested, among other things,... the cash flow of the enterprise. For example, investors must know if they will receive dividends and when they should buy, hold and sell stock. Lenders are interested in determining whether interest and principal... loans will be paid when due. Suppliers, other creditors and customers must determine whether they will be paid ... time or will continue to receive a product or service on which they might depend. Employees are interested in the continuation of their employment and, therefore, in the stability and profitability ... their employment. Members of the public are also interested in the impact of the activities of the enterprise ... the general welfare.

The usefulness of information can be determined ... its relevance to the needs of the users and the extent ...

which users can rely ... such information. Other important characteristics of useful information include comparability and understandability. Besides, users benefit more ... information that is available at the time it is required, information provided long after it is needed is ... little relevance.

Financial statements should disclose all items that are material enough to affect evaluations or decisions. The information published ... reporting enterprises must assist users ... predicting future prospects of the enterprise.

Transactions and events that form the basis of financial statements are sometimes open ... different interpretations. They can be viewed according to their legal form or their economic reality. Enterprises should emphasize the economic substance of transactions and events.

Information must be free ... bias with respect ... various users, it should assist in decision-making but should not influence decisions in a predetermined direction.

Financial statements should be prepared in a comparable way so that the performance of different enterprises, or of the same enterprise over time, can be examined. The comparability of financial statements is enhanced ... the relative stability of accounting policies, which specify the methods by which a reporting

enterprise measures, accumulates and summarizes the economic events and data ... its records. Stability means that no change in accounting policies will be made unless it is clearly necessary. Comparability across enterprises requires that a consistent set of definitions, units of measurement, assumptions, measurement techniques and reporting intervals be applied. If financial statements from enterprises in different countries are to be compared, the users must be aware ... the relative differences among national accounting policies.

Comparability can be enhanced by the harmonization of national standards or the adoption of international standards.

Based on: Objectives and concepts

Underlying Financial

Statements, ISAR, 1989

Words you may need:

the public at large широкая публика understandability n понимаемость; (зд.) читаемость disclose v раскрывать (информацию)

reporting enterprise предприятие, подающее свою отчетность bias n необъективность, предвзятость

predetermined adj предопределенный, заранее решенный to be aware of знать, быть осведомленным (о чём-л.)

Ex. 10. a) Open the brackets putting the verbs in the correct form. b) Say what is a Chart of Accounts in Russia and what it provides for.

In the West each company (to have) a certain freedom in the design of its own set of accounts so as to reflect the nature of its business and the needs of its management in directing that business. In Russia this process (to regulate) centrally, there (to be) a tradition of using a uniform Chart of Accounts.

The first uniform Chart of Accounts (to appear) in Russia in the 1920s. It (to intend) for industries only and was revised periodically. In 1961 the first national uniform Chart of Accounts (to create) and put into operation. With only insignificant changes, this chart (to use) in accounting practice until 1992. In 1992 transition to a new chart (to make). The current Chart of Accounts (to consist) of about 100 accounts and 60 subaccounts grouped into 10 main sections. All accounts included in this uniform chart (to call) "synthetic" (main or summary) accounts. On the basis of this chart, each enterprise also may create a set of "analytic" (supporting) accounts if needed to supplement the synthetic accounts. The Chart of Accounts can be considered the most important element of the accounting system in Russia because it (to determine) the accounting practice and other elements of the system.

The Chart (to provide) for the following: an interrelated classification, grouping, and generalization of information about business activities of enterprises, a unified methodological basis for the organization of accounting in the whole national economy, an effective system of control of indicators for business activities, comparability of accounting procedures used and information generated in the accounting systems of different enterprises, etc.

Words you may need:

set of accounts перечень счетов synthetic account синтетический счет

analytic account аналитический счет

interrelated classification взаимосвязанная классификация grouping n группировка

methodological basis методологическая база indicator n показатель

Ex. 11. a) Fill each gap with a suitable word from the box.

b)Sum up the text in 5-7 sentences and present your summary in class.

c)Name the most important events in the development of the accountancy profession in the world. accountants

principles organized membersback profession creation throughoutnumber role organizations functions

Accountancy Profession

The organization of the accountancy profession dates_______to January 1853 when eight accountants in Edinburgh, Scotland met for the purpose of seeking recognition of their_______as a separate and distinct profession. Their discussion of their professional situation resulted in the________of the Institute of Chartered Accountants of Edinburgh. Since that time numerous professional accountancy organizations have been established _________ the world. The process is going on.

In 1977 the International Federation of Accountants (IFAC) was established. Its initial membership was 63 organizations representing 49 countries, but within a decade, the ________ grew to 105 organizations from 79 countries. The establishment of the IFAC recognized the need for international coordination of the objectives of professional accountancy organizations and means of achieving those objectives. Accountancy is an international profession. Under the conditions of global interdependence of countries through trade, finance, and crossborder investments, the_________of the IFAC is becoming more important.

The size and principles of accountancy_________vary. Some organizations comprise accountants working in commerce, industry, and government organizations, as well as in public practice (auditing), others consist solely of members in public practice.

The main _________ of the accountancy profession may be summarized as follows:

• to protect the public by ensuring the observance by its members of the highest________of professional and ethical conduct;

• to promote and increase the knowledge, skills, and proficiency of members of the organization and students;

• to preserve the professional independence of _______ in whatever capacities they may be serving;

• to maintain the legitimate rights of its________.

IFAC was _________ in recognition of the growing changes towards internationalization of the world

economy, business and trade. Words you may need:

Institute of Chartered Accountants Институт дипломированных бухгалтеров observance n соблюдение

conduct n поведение proficiency n (зд.) опыт preserve v сохранять

DISCUSSION

Ex. 12. a) Read the texts and single out the main facts.

b) Present them in a short review and compare the information and viewpoints in Text (a) and Text (b).

a)For many years the accounting system in Russia was criticized by Western academicians for its failure to adhere to Western accounting principles. Such criticism is no longer valid. Since the early 1990s, accounting in the Russian Federation has changed significantly.

The year 1991 was crucial in accounting development in Russia due to the following three events:

a)Publication of the new Chart of Accounts;

b)Production of a new set of financial statements similar to those used in Western accounting;

c)Beginning of preparations for radical change in accounting and auditing regulation.

In 1992, Regulation on Accounting and Reporting in the Russian Federation was approved by decree of the Government of Russia. The document diminished the control function of accounting and declared the following equal objectives of accounting:

1) Maintenance of control over the availability, movement, and use of material, manpower and monetary resources according to approved norms and estimates;

2) Provision of full and reliable information about the performance and financial results of an enterprise, which is indispensible for operational management as well as for investors, suppliers, customers and creditors, tax, financial, and bank authorities, and others interested in the financial and business activity of the enterprise.

It would not be an exaggeration to say that an essentially new Russian accounting system has come into being with the introduction of the new Chart of Accounts which includes greater cohesion to international accounting norms.

The essential elements of accounting methodology are as follows:

•Documents form the legal foundation for recording transactions according to the approved rules of bookkeeping. No entry should be made unless the bookkeeper has the primary document.

•Taking inventory is the sole means of controlling the physical safety of assets and their valuation. It is the main method of supervising persons who are financially responsible for assets. The safeguarding of assets is always entrusted to a financially responsible person.

•The uniform Chart of Accounts, which provides the nomenclature of accounts and correspondence among them, must be used by all types of enterprises.

•Double entry is a traditional accounting concept that is accepted in Russia as it is in all developed countries.

•Internal reporting includes the general ledger, summary (principal) account registers, primary documents, inventory data, etc. External reporting includes the Balance Sheet, Statement of Financial

Results and Their Uses, and supplemental forms that are uniform and obligatory for all types of enterprises. Nonprofit organizations and banks have their own uniform charts of accounts and financial reporting forms. Reporting is carried out according to the statutory regulation and presented within strictly prescribed time limits.

•Information generated by the accounting system must be timely, reliable, full, accurate, and objective.

•Historical cost accounting is the only method of internal and external reporting permitted.

Words you may need:

adhere v придерживаться, оставаться верным принципам accounting principles принципы бухучета

valid adj имеющий силу, юридически действительный indispensible adj необходимый, незаменимый cohesion n связь

primary document первичный документ taking inventory инвентаризация

sole adj единственный

financially responsible person материально-ответственное лицо nomenclature n номенклатура (перечень наименований) correspondence n корреспонденция (счетов)

internal reporting внутренняя отчетность general ledger главная бухгалтерская книга summary account register сводный журнал inventory data инвентарные данные external reporting внешняя отчетность

Statement of Financial Results and Their Uses Отчет о финансовых результатах и их использовании financial reporting form бланк финансовой отчетности

historical cost accounting учет на основе стоимости приобретения

b) From an international perspective, it is important to remember that while based on similar principles, Russian accounting does not fully meet international accounting standards (IAS). The main differences are as follows:

•Sales are usually recorded on a cash basis. The cost of goods/services delivered but not yet paid for remains on the balance sheet until payment is received. Most Russian taxes are sales-based. As a result, companies try to minimize sales in their accounts. When sales are recorded on a cash basis, allowances are not made for bad debt, in spite of the fact that bad debts may represent a considerable share of accounts receivable. Sales figures for Russian companies tend to be understated compared with the accrual sales of Western companies.

•Cost of goods sold. Russian companies report the full cost of goods sold, which includes production

costs, transportation, depreciation, marketing, and financial expenses. No cost items are disclosed separately. Social costs are not included in the cost of goods sold.

• Depreciation: Only a straight-line depreciation method is allowed. The depreciation rates are fixed by the government and are as a rule significantly lower than in the West. Accelerated straight-line depreciation has been permitted since January 1, 1995 but is still rarely used.

•Fixed assets: Fixed assets pose the most serious problem. Fixed assets are accounted for at historical cost and cover property, plant and equipment. Land is not treated as a fixed asset and does not appear on the balance sheet at all. Even if depreciation rates are lower than in the West, fixed assets are generally undervalued compared with Western practice.

•Accounts receivable: Since most Russian companies record sales when they receive payment, the sales margin is not accrued until that time. Therefore accounts receivable are understated given that the sales margin is not reflected. Overdue accounts receivable are not disclosed separately.

•Consolidation of accounts. Russian companies, including holding companies, are not required to submit consolidated reports. No consolidation standards have been established yet. Some of the holding companies prepare aggregated reports, summing up 100% of all subsidiaries and associates without accounting for intragroup transactions and minorities. Consequently, the reported results of Russian holding companies are usually significantly overstated.

All other aspects of Russian accounting are basically in line with IAS. The Russian government is taking measures to eliminate the most serious divergences.

Words you may need:

bad debts безнадежные долги

accounts receivable дебиторская задолженность

straight-line depreciation method метод равномерного начисления износа accelerated straight-line depreciation method метод ускоренного начисления износа sales margin доход от продаж

overdue adj просроченный

consolidation of accounts консолидация счетов

IAS – international accounting standards divergence n отклонение

Ex. 13. Read the dialogue, sum up its content and act it out:

Accounting Methods

American: Accounting is a kind of data processing and recording. In my country it's usually the accountant who decides on the form which this recording shall take and on the methods to be used.

Russian: Do you mean that in writing financial statements for stockholders and lenders accountants can make the firm look strong and healthy and when preparing tax returns, on the other hand, they can make the firm look poor and weak?

Am.: Accountants prepare financial statements according to rules set by law and by the accounting profession itself. Often the rules allow more than one way of reporting information.

R.: Accounts can be kept on an accrual or a cash basis. How do the two methods differ in real life? Am.: Firms that keep their accounts on an accrual basis report costs and revenues in the year in which sales are made even if the customers do not pay until later. Those that keep their accounts on a cash basis report costs and revenues in the year in which payment is made.

R.: I know that each method has its pros and cons. But how does each method affect the way the outside users of the income statement and the balance sheet see the image of the company?

Am.: The accrual basis matches the income statement more closely to the balance sheet and accrual basis accounts show rapidly rising income. But little of the income is cash!

R.: What is more, the accrual basis assumes that all accounts receivable will be collected, but in reality some may not.

Am.: For these reasons, some people think the cash basis is a more prudent way to draw up an income statement. Accountants have also to decide how to determine the monetary value of an item included in a financial statement.

R.: What problems can arise here?

Am.: Assets can be recorded at the amount of cash paid to acquire them at the time of their acquisition. R.: At the historical cost, in other words.

Am.: Yes. In addition, current replacement cost and net realizable value can be used. R.: Are goods held in inventory another problem area?

Am.: Yes, there are two ways of dealing with inventories. One is FIFO, the other is LIFO.

R.: Theoretically, Г believe, we can argue in favour of both methods. Which works better in real life? Am.: In recent years many firms have switched from FIFO to LIFO.

R.: Do you have an explanation?

Am.: Yes. During periods of inflation, LIFO results in a higher cost of goods and, hence, a lower reported income. As a result a firm that uses LIFO pays less income tax.

Words you may need: accounting method метод учета

cash basis метод записи доходов и издержек на счетах только при их поступлении и выплате;

кассовая база

pros and cons за и против

the image of a company репутация, имидж компании

monetary value of an item стоимость операции (статьи в балансе) в денежном выражении current replacement cost текущая восстановительная стоимость

net realizable value чистая (потенциальная) стоимость реализации inventories pl товарно-материальные запасы

FIFO «первая партия на приход – первая в расход»

LIFO «последняя партия в приход – первая в расход»

Ex. 14. Give extensive answers to these discussion questions:

What is the role of accountancy in a free-market economy?

What is managerial accounting?

Who needs the information provided in financial statements?

How are accountants classified in Russia?

What services do public accountants offer their clients?

What is done in this country to create a strong and respected professional body of accountants? What accounting system is most widely practised in the world?

In what way does cash basis accounting differ from accounting on an accrual basis? What do you think of the problem of harmonizing national accounting standards?

In order to get prepared for participation in the class discussion of the questions, write a short paragraph, explaining:

a) What accounting is and what role it plays in a free-market economy.

b)What sort of statement the balance sheet is.

c)What sort of statement the income statement is.

d)The difference between the two branches of accounting.

e)Accounting principles.

f)The functions of the Chart of Accounts. Ex. 15. Prepare a short talk on the following:

a)The work of public accountants, private accountants, and accountants who work for units of the government and non-for-profit firms.

b)Why do all firms need both fixed and working capital?

c)How is Russian accounting developing? Do any of the Big Eight have offices in Russia?

d)What are your own sources of funds? Earnings from employment? Contributions from parents or others?

e)If you are a student, describe the fixed capital and working capital of your college or institute. List some fixed assets that it owns.

Ex. 16. A company needs the chief accountant, who will: maintain accounts payable ledger

supervise banking and cash activities, supply contracts, reconciliation of bank statements deal with local tax authorities

work directly with the CFO supervise the accounting department

cooperate with internal and external auditors The requirements include:

excellent English degree in accounting

knowledge of the Russian accounting system familiarity with GAAP

proper computer skills ability to work independently

Do many applicants stand a good chance? READING PRACTICE

Ex. 17. a) Study the Balance Sheet and the Income Statement of a British company given below: Balance Sheet

А. Неоплаченный акционерный капиталA. Called up share capital not paidВ. Основной капиталB. Fixed

капитальное строительство 4. Payments on account and assets in course of constructionIII. ИнвестицииIII. Investments1. Вложения в акции компаний группы1. Shares in

group companies2. Займы, выданные компаниям группы2. Loans to group companies3. Вложения в акции родственных компаний3. Shares in related companies4. Займы родственным компаниям4. Loans to related companies5. Прочие инвестиции5. Other investments6. Прочие займы6. Other loans7.

Собственные акции7. Own sharesС. Ликвидные активыC. Current assetsI. Материально-

производственные запасыI. Stocks1. Сырье и покупные полуфабрикаты1. Raw materials and consumables2. Незавершенное производство2. Work in progress3. Готовая продукция и товары для перепродажи3. Finished goods and goods for resale4. Авансы поставщикам4. Payments on accountII.ДебиторыII. Debtors1. Торговые дебиторы1. Trade debtors2. Задолженность компаний группы2. Amounts owed by group companies3. Задолженность родственных компаний3. Amounts owed by related companies4. Прочие дебиторы4. Other debtors5. Задолженность по неоплаченному акционерному

капиталу5. Called up share capital not paid6. Авансовые платежи и начисления6. Prepayments and accrued incomeIII. ИнвестицииIII. Investments1. Вложения в акции компаний группы1. Shares in group companies2. Собственные акции2. Own shares3. Прочие инвестиции3. Other investmentsIV. Остатки на

счетах в банках, денежная наличностьIV. Cash at bank and in handD. Авансовые платежи и

начисленияD. Prepayments and accrued incomeE. Кредиторы: обязательства к погашению в течение годаE. Creditors: amounts falling due within one year1 . Облигационные займы1. Debenture loans2.

Задолженность банку2. Bank loans and overdrafts3. Авансы полученные3. Payments received on account4. Торговые кредиторы4. Trade creditors5. Векселя к платежу5. Bills of exchange payable6.

Задолженность компаниям группы6. Amounts owed to group companies7. Задолженность родственным компаниям7. Amounts owed to related companies8. Прочие кредиторы (включая налоговые органы и органы социального обеспечения)8. Other creditors including taxation and social

security9. Различные обязательства, доходы будущих

периодов9. Accruals and deferred incomeF. Нетто-ликвидные активы (обязательства)F. Net current assets (liabilities)G. Активы за вычетом краткосрочных обязательствG. Total assets less current liabilitiesН. Кредиторы: обязательства к погашению со сроком более годаH. Creditors: amounts falling due after more than one year1. Облигационные займы1. Debenture loans2. Банковские займы2. Bank loans and overdrafts3. Авансы полученные3. Payments received4. Торговые кредиторы4. Trade creditors5. Векселя к платежу5. Bills of exchange payable6. Задолженность компаниям группы6. Amounts owed to group companies7. Задолженность родственным компаниям7. Amounts owed to related companies8. Прочие кредиторы (включая налоговые органы и

органы социального обеспечения)8. Other creditors including taxation and social security9. Различные обязательства, доходы будущих

периодов9. Accruals and deferred incomeI. Оценочные резервы для покрытия обязательств,

расходовI. Provisions for liabilities and charges1. Пенсионный фонд и другие обязательства1. Pensions and similar obligations2. Резервы по налогам2. Taxation, including deferred taxation3. Прочие резервы3. Other provisionsJ. Различные обязательства и доходы будущих периодовJ. Accruals and deferred incomeК. Капитал и резервыK. Capital and reservesI. Акционерные капиталI. Called up share capitalП.

Эмиссионный доходII. Share premium accountIII. Резерв переоценкиIII. Revaluation reserveIV. Прочие

резервыIV. Other reserves1. Резерв для выкупа капитала1. Capital redemption reserve2. Собственные акции в резерве2. Reserve for own shares3. Резервы3. Reserves provided for by articles of association4. Прочие резервы4. Other reservesV. Прибыли и убыткиV. Profit and loss accountProfit and Loss Account1. Товарооборот1. Turnover2. Себестоимость реализованной продукции2. Cost of sales3.

Валовой доход или убытки3. Gross profit or loss4. Расходы по сбыту4. Distribution costs5.

Административные расходы5. Administration expenses6. Другие операционные доходы6. Other operating income7. Прибыли по акциям компаний группы7. Income from shares in group companies8.

Прибыли по акциям родственных компаний8. Income from shares in related companies9. Прибыли от инвестиций в другие статьи

основного капитала9. Income from other fixed asset investment10. Проценты полученные и другие прибыли10. Other interest receivable and similar income11. Списанные инвестиции11. Amounts of written off investments12. Проценты уплаченные и аналогичные расходы12. Interest payable and similar charges13. Налог на прибыль или убытки от основной

деятельности13. Taxation on profit or loss on ordinary activities14. Прибыли и убытки от основной деятельности

после уплаты налога14. Profit or loss on ordinary activities after taxation15. Чрезвычайные доходы

16.Чрезвычайные расходы

17.Чрезвычайные прибыли или убытки

18.Налог на чрезвычайные прибыли или убытки

19.Другие налоги, не указанные выше

20.Прибыли или убытки за отчетный период15. Extraordinary income

16.Extraordinary charges

17.Extraordinary profit or loss

18.Tax on extraordinary profit or loss

19.Other taxes not shown under the above items

20.Profit or loss for the financial year

b) Read the text that follows to find the answers to the following questions:

• What financial document presents the position of the enterprise?

• What can assets include?

• What can liabilities include?

• What is equity?

• What financial document measures the performance of the enterprise? Financial Statements And Their Elements

A. BALANCE SHEET

The position of the enterprise is presented in the balance sheet. That statement shows resources and the claims to or interests in them and provides an indication of the financial strength of the enterprise. The balance sheet includes the following elements:

ASSETS

Assets include property, plant and equipment, financial leases, investments in subsidiaries and other enterprises; long-term receivables; purchased goodwill, patents, trade marks and similar intangibles; marketable securities; current receivables (or trade debts); inventories; cash and bank balances; and prepaid