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Russia Adopts New IFRS Standard Definition of Business
Russia's Ministry of Finance has clarified the meaning of the term “business” in accordance with IFRS standards. It also has introduced a test for the presence of fair value concentration, which will determine if a set of activities and assets constitutes a business by analyzing whether the set is fundamentally significant based on whether there is a return generated.
This is according to The Order of the Ministry of Finance of Russia No. 11n dated January 22, 2019, “On the Introduction of the International Financial Reporting Standards Document in the Russian Federation.” The order introduces concepts from IFRS “Business Definition (Amendments to IFRS 3” into Russia.
The order comes into force for voluntary use within the territory of the Russian Federation from the date of its official publication. It will be mandatory for an organization to apply these concepts for businesses acquired after the start of the first annual reporting period starting on or after January 1, 2020, and for asset acquisitions that take place within this period or after it.
Translated by Alinga Consulting Group.
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