Financial report and activity report in conditions of Russian aggression against Ukraine

Circumstances related to Russian aggression against Ukraine should be adequately taken into account in the accounts, consolidated accounts and in the activity report.

The Accounting Standards Committee has prepared recommendations on these issues to help prepare these reports and keep up-to-date accounts.

The Russian aggression against Ukraine and its associated scale of action (sanctions and assistance) by the international community is an emergency situation, the consequences of which are only a small part predictable and therefore require proper accountancy.

The conflict in Ukraine may affect the financial situation of individuals, including in particular their liquidity and pensions, which may cause radical changes in the business model of some entities. It is crucial to assess the situation of the individual and its surroundings under conditions of uncertainty. All of this has defined financial and accounting implications.

At a time when during a pandemic COVID-19 Russian aggression has been imposed on Ukraine, the time of the financial statements for the year 2021 [1] . The head of the unit, together with the persons drawing up the report, should make a number of decisions. These include, in particular, decisions on the wording, justification and scope of disclosures relating to the assumption of continuation of business or due account taken of the effects of events after the balance sheet date.

Extraordinary circumstances relating to Russian aggression against Ukraine should be adequately taken into account in the accounts, consolidated accounts and in the activity report.

In order to support the reporters, the Accounting Standards Committee has drawn up recommendations that will be helpful, in particular in presenting and disclosing the effects of Russia's aggression on Ukraine, and will facilitate the day-to-day inclusion of these effects in the accounts.

At the same time, we note that the Committee's recommendations issued in December 2020 Financial statements during the pandemic Covid-19 (link), did not lose the news.

The persons responsible for drawing up financial statements and activity reports shall be the addressee of the recommendation, in particular:

• managers of units within the meaning of the Act,
• persons entrusted with the keeping of accounts (accountaries and accounting offices) and
• stakeholders awaiting reliable and clear information on the assets and financial situation and the financial result of the entity.

Recommendations may also be helpful to supervisory board members and auditors.

The purpose of the recommendation is to support the management of individuals and accounting officers when deciding to take account of the consequences of events arising from the emergency situations of Russian aggression against Ukraine in the accounts, financial statements, consolidated accounts and in the activity report, if any.

Russian aggression on Ukraine began 24 February 2022 Therefore, recommendations concern: - financial statements, consolidated accounts and activity reports[3] units whose balance sheet date is before 24 February 2022[4] , and the annual financial statements were not approved (Chapters II and VI of the recommendations), - financial statements, consolidated accounts and activity reports of entities whose balance sheet date was 24 February 2022 or later (Chapters II, V and VI of the recommendation), - the current recognition of the effects of Russia's aggression on Ukraine in the unit accounts, and in particular the revenue and costs associated with the assistance of refugees from Ukraine (Chapters III, IV and V of the recommendation).

Recommendations do not address issues specific to financial market entities, nor do they address tax aspects.

Recommendations were prepared on the basis of the best knowledge available per day 4 April 2022 Given the dynamics of the situation and the high uncertainty associated with the conduct of business activities, they may be amended or supplemented according to the needs and issues raised for consideration by the Committee.