The Law of Ukraine

On Accounting and Financial Reporting in Ukraine

Date of Entry into Force:
January 1, 2000

The Law of Ukraine “On Accounting and Financial Reporting in Ukraine” (hereinafter referred to as “the Law”) defines legal grounds for regulation, organization, keeping of accounting and making financial reporting in Ukraine.

According to the Law, accounting is the process of reveal, measure, registration, accumulation, generalization, storage and transfer of information about activity of an enterprise to the external and internal users for making decisions.

The purpose of keeping accounting and making financial reporting is provision for the users of full, reliable and objective information about financial state, results of activity and circulation of money of an enterprise for making decisions. Accounting is an obligatory type of registration which is kept by an enterprise. Financial, tax, statistic and other types of reporting that use money as measure are based on the data of accounting.

The Law envisages that accounting in Ukraine shall be based on the principles of circumspection, full explanation, independence, consistency, continuity, correspondence of incomes and expenditures, domination of essence over form and periodicity.

Accounting at the enterprises shall be kept continuously starting from the day of registration of the enterprise until its liquidation. The issues concerning organization of accounting at an enterprise are within the jurisdiction of its owner or authorized body (official) in compliance with the legislation and statutory documents.

Accounting at the enterprises may be performed depending on the choice of the owner of business entity in the following forms:
  • introduction into the enterprise staff of the position of accountant or creation of accounting service headed by the accountant;
  • use of services of the specialist in accounting, who is registered as an entrepreneur and carries out entrepreneurial activity without the establishment of legal entity;
  • keeping of accounting on contractual basis by the centralized accounting department or auditing firm;
  • independent keeping of accounting and making reporting directly by the owner or head of the enterprise.

The head of the enterprise shall create necessary conditions for accurate keeping of accounting. S/he shall also ensure steady fulfillment by all subdivisions, services and employees, who deal with accounting, of rightful accountant’s demands regarding observation of the procedure for registration and presentation of primary documents to accounting.

According to this Law, the duties of the chief accountant of enterprise are as follows:
  • ensuring observation at the enterprise of set unified methodological principles of accounting, making and presenting of financial reporting in the set terms;
  • organization of control over the reflection in the accounting records of all economic transactions;
  • participation in registration of materials connected with deficiency and compensation of losses from deficiency, stealing and damage of enterprise’s assets;
  • ensuring verification of the state of accounting in subsidiaries, representations, departments and other separated subdivisions of enterprise.

The ground for accounting of economic activity shall be primary documents, which register the facts of conducting economic transactions. Primary documents shall be made during the economic transaction and if it is impossible – immediately after its end. Consolidated accounting documents may be drafted for control and regulation of data processing on the basis of primary documents.
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