By Order No. 157n dated 04.10.2023, the Ministry of Finance approved FSBU 4/2023 “Accounting (Financial) Statements” (hereinafter, the Standard). It must be applied starting with the accounting (financial) statements for 2025. The Standard is mandatory for organizations (commercial and non-commercial), except for the Bank of Russia and budgetary institutions. Below we review the innovations introduced by FSBU 4/2023 and the planned amendments to this Standard.
FSBU 4/2023 is a fundamental document that defines:
Note that the basic set of statements remains the same: the balance sheet, the statement of financial results, and appendices to them (the statement of changes in equity, the statement of cash flows, and the explanatory notes).
One of the most important novelties of the Standard is the detailed conditions under which statements are considered reliable. These include:
Attention: paragraph 10 of FSBU 4/2023 sets out the concept of materiality. This criterion is now essential when preparing accounting (financial) statements. The focus should shift toward information without which users cannot make sound economic decisions. Immaterial data may be omitted, except for the minimum list of items specified in the FSBU.
FSBU 4/2023 introduces rules for completing the heading (cover) section. In addition to the requirements provided for in para. 58 of FSBU 4/2023, the following must be indicated:
The Standard also establishes the following rules:
In addition, new line codes have been introduced, and the composition of signatures on the accounting (financial) statements is described in detail.
The minimum list of items has been updated: “Investment property” and “Non-current assets held for sale” have been added, while, for example, “Research and development results” and “Income-generating investments in tangible assets” have been removed.
Greater flexibility: entities may introduce additional items and group indicators to better reflect the substance of transactions.
Clarified definitions: criteria for classifying assets and liabilities as current or non-current have been elaborated.
Important clarification: advances issued in connection with the creation of non-current assets must now be classified strictly as non-current assets.
Offsetting of other income and expenses: it is permitted to offset other income and expenses of a similar nature.
Discontinued operations: all indicators must be presented on a net basis as a single financial result, which will require separate analytical accounting.
Disclosures: where necessary, information on inventory write-offs, revaluation, disposal of non-current assets, etc., must be disclosed separately in the statement or in the notes.
This form has undergone significant structural changes. It now consists of one section rather than three. Adjustments related to error correction and changes in accounting policies are recognized within its main section. Additional disclosure requirements have been introduced: the composition and purpose of the reserve capital; dividends accrued for the period; and dividends per share.
Changes here are minimal. One new line has been added to present interest receipts on trade receivables from customers, which are included in cash flows from operating activities.
The explanatory notes must now meet the following requirements:
For SMEs preparing simplified reporting, the mandatory forms remain the balance sheet and the statement of financial results. However, explanatory notes with a minimum set of disclosures are now added. The statements of changes in equity and of cash flows are completed only where the information is material.
FSBU 4/2023 introduces new rules for interim reporting. It is important to remember that preparing interim statements is mandatory only for a narrow circle of entities (e.g., public joint-stock companies) but may be initiated by the owners’ decision.
Key rule: the composition of interim statements must be fully identical to the annual set. It is not allowed to submit only the balance sheet and the statement of financial results. The Standard offers two options for their preparation:
It is already known that the Ministry of Finance is preparing amendments to FSBU 4/2023. The amendments (a draft order has been published on the Unified Portal for Draft Regulatory Acts, ID 160966) will, in particular, clarify the criteria for classifying assets as current. Currently, an asset is considered current if it is intended for use within less than 12 months or within the operating cycle. The new wording proposes: “within the operating cycle or a period of no more than 12 months.”
It is also planned to adjust line codes in the balance sheet. For example, the line “Total equity” in the balance sheet will be titled “Total equity / Total targeted financing (for non-profit organizations)”. And in the statement of changes in equity, the line “Equity as at 31 December of the previous year after adjustments” is planned to be assigned code “3201” instead of “3230”.
Implementing FSBU 4/2023 is not just a change of forms but a transition to a new level of transparency in financial information. Careful preparation and study of the Standard will allow accountants to make this transition smoothly and avoid errors in reporting.
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