The Institute of Accounting of the Republic of Lithuania

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The Institute of Accounting of the Republic of
Lithuania

• The role of a National Accounting Standards
  Setter in the European Union

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Overarching aim

• Improvements to national accounting system
• from rules based (tax liked) rules approved by
  Ministry of Finance
• to independent standards setting system
• full convergence with
• European Union (EU) Directives
• in respect to current situation in Lithuania

achieved by
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• active cooperation with
• relevant EU institutions responsible for
  accounting issues and
• International Accounting Standards Board and
• other national accounting standards setters of EU
  countries

and
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• enlightenment of professional
• society
• of international practice in accounting by
• translating IAS/IFRS and
• giving explanations for application by
• articles in professional journals and discussions
  in conferences while
• inviting experts of IASB

executed by
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• the Institute of Accounting of
• the Republic of Lithuania (IoA)
• the non-profit organization
• established in under the Law of Accounting

whose activity is
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• preparation of national accounting standards
  (Business Accounting Standards (BAS))
• training of accounting professionals
• participation in the IASB and EU institutions
  activity concerning accounting issues

and
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structure
The Institute of Accounting of the Republic of
Lithuania
Founders the highest body of the Institute
the Board of Standards approves BAS and
methodical recommenda tions
the Adminis tration runs the activity of
the Institute
that are
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• Ministry of Finances 50 voting rights and
• Private audit companies and autonomous
  professional organizations 50 voting rights

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Objectives of the Accounting Standards Board

• principles guiding the establish of BAS
• principle 1 independent standard setting
• independent board members
• meetings of board could be attended by public
• thorough due process
• no political influence

and
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• principal 2 practice based standards
• methodical recommendations for
• each BAS
• based on realistic situations in practice
• prepared along with relevant standard

lead to
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• high quality standards
• understandable
• enforceable
• transparent and comparable information
• to help users to make economic decisions.

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• preparing and / or amending
• BAS
• procedure
• working draft
• co-ordination draft
• outgoing for the coordination with different
  institutions
• discussion draft
• confirmed business accounting standard

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• practice
• BAS, approved and published till 1 January, 2005
• 25 BAS concerning
• implementation guidance on financial reporting
  together
• with methodical recommendations for each standard

exactly
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• BAS 1 Financial reporting
• BAS 2 Balance sheet
• BAS 3 Income statement
• BAS 4 Statement of changes in equity
• BAS 5 Cash flow statement
• BAS 6 Explanatory notes
• BAS 7 Changes in accounting policies, accounting
  estimates and correction of errors
• BAS 8 Equity
• BAS 9 Inventories
• BAS 10 Revenue from sales

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• BAS 11 Cost of sales and operating costs
• BAS 12 Non-current tangible assets
• BAS 13 Intangible assets
• BAS 14 Business combinations
• BAS 15 Investments in associates
• BAS 16 Consolidated Financial Statements and
  Investments in Subsidiaries
• BAS 17 Biological assets
• BAS 18 Financial assets and financial obligations
• BAS 19 Provisions, contingent liabilities and
  contingent assets, and events occurring
  after the balance sheet date

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• BAS 20 Operating lease, financial lease
• and loan-for-use
• BAS 21 Grants and subsidies
• BAS 22 Changes in foreign exchange rates
• BAS 23 Impairment of assets
• BAS 24 Income tax
• BAS 25 Construction and other long term contracts

that are
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• announced immediately as
• approved
• in the official publication of Lithuanian
• on website of IoA
• all standards and methodical recommendations as
  well as discussion drafts in Lithuanian
  language
• all standards in English language
• www.apskaitosinstitutas.lt

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• projects on the agenda
• at the point of exposure draft
• amendments for BAS 12 Property, plant and
  equipment
• BAS 29 Interim financial reporting
• BAS 35 Reorganization of the companies
• BAS 36 Unlimited liability legal entities
  accounting
• at the point of discussion paper
• BAS 30 Related parties
• BAS 34 Segment reporting

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• addressing urgent issues
• promptly
• standards if
• widespread and
• practical relevance with
• necessity to prepare in short time
• inquiries from different entities
• in 10 days if not arguable
• in one month if arguable

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• International cooperation with
• relevant EU institutions ARC, EFRAG,
• IASB
• national standard-setters of other EU countries
  Latvia, Estonia and etc.

for
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• participation actively in the process of
  development of EU Directives and setting/amending
  IAS/IFRS for
• international practice and explanations according
  relevant issues and
• personal practice to share

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• structure of the Standards Board
• 4 full-time and 5 part-time members
• sole responsibility for setting agenda and
  standards
• presently from different institutions and
  companies

exactly
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• 1 member - Ministry of Finance
• 2 members - audit and accounting
• professionals
• 1 member - Securities Commission
• 1 member - Insurance Supervisory Commission
• 4 members full time members
• and 2 representatives from Tax Department as
  permanent visiting participants

that
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• the Standards Boards work is
• supported by
• 4 technical staff that
• consist of
• 2 experts of accounting
• prepares standards, methodical recommendations
  and
• answers to inquiries
• linguist gives explanations over phrase of
  provisions
• lawyer gives explanations of compliance with
  other laws

and
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• the Standards Boards work is
• financed from
• state budget
• commercial activity of IoA
• publishing binders of BAS and methodical
  recommendations
• seminars and courses for accounting and audit
  professionals

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Early changes

• Change of founders
• exclusion of private audit companies
• Withdrawal of commercial activity as
• to be financed only from state budget