At the beginning, we see revenue of only 370 million rubles, and at the end, a profit of almost 30 billion rubles. This profit did not come from the void. Added interest receivable - 13 billion rubles. They do not relate in any way to the main activity, but they affect the profit. Therefore, it often happens that profit is greater than revenue, although it looks strange. Knowing the specifics of Magnit's business, we are well aware that its revenue should be much higher than its profit.
The thing is that Magnit is not just one public company, but a group of companies. And each company in this holding can have its own type of activity. In the RAS report, we will see the revenue directly from the activities of the company we are considering. In our case, it is "Rent and management of real estate". This is evidenced by the indicator in the column "Income from participation in other organizations" - 24 billion rubles. Who brought this profit? Just other companies of the holding.
Now let's see how this problem is solved in IFRS reporting.
Download the IFRS report from the site of the same Magnit and open the first page:
Go to page 9 and see this:
This is a complete list of companies belonging to the Magnit group. Among them there is, for example, "Thunder", the main activity of which is retail... All of them brought the hidden profit and revenue that we see in the RAS report.
The IFRS report provides us with already consolidated data. Here, for example, the revenue of the group of companies "Magnit" is already more than 1 trillion rubles.
This is a very good example to understand the difference between RAS and IFRS.
IFRS - International Financial Reporting Standards Is a set of documents governing the rules for drawing up financial statements of enterprises. Businesses wishing to publicly sell their shares on the stock market must publish their financial reports... This was done so that potential investors could objectively assess the economic situation of the company. The form of financial statements, thanks to IFRS, is unified and easy to read, and the information that is reflected in it is sufficient for an objective assessment. Thanks to financial reports, investors can assess the economic prospects of the company and make an appropriate decision whether to invest their money in stocks or not.
As I already wrote in the article, a portfolio strategy involves the selection of shares of those companies that meet the criteria for selecting an investor. Each has its own specific approach to stock valuation. It is the effectiveness of these criteria that is the key to investor success.
What they pay attention to when choosing stocks:
- Return and risk from fluctuations in market value based on historical data.
- Correlation (unidirectionality) of the dynamics of quotations with other securities and indices.
- The financial position of the company.
- The financial condition of the industry and the country's economy.
- Data of technical and price analysis of the value of the security.
Of course, this is not a complete list of what is important to consider when choosing an investment object. Some investors carry out a thorough analysis of all the above points and are not limited to this. Others put a lot of emphasis on just a few of them. For example, Warren Buffett does not attach any importance to fluctuations in stock prices, does not apply technical analysis graphs and doesn't look for any correlations. As he puts it: “I never solve equations with Greek letters” (correlations are determined through the so-called coefficients α and β). But he closely delves into the financial and annual reports of companies, and by no means for Last year, but at least the last 10 years.
The financial statements contain all the most valuable information about the company's activities. The company can have beautiful signs on the facade and at the same time sit "head over heels" in debt. Conversely, behind an unremarkable name, a very strong company from an economic point of view can be hidden. In the financial statements, it all comes out.
In our country, there are two forms of financial reporting in accordance with IFRS and RAS (Russian Accounting Standards). In general, there are slight differences between them, but investors are more likely to use IFRS reporting. I suggest that you familiarize yourself with it.
Financial reports are published quarterly and year-end. As a rule, for comparison, they provide data not only for under reporting period but also for a similar past. For example, a 2016 report will also contain data for 2015.
An IFRS financial report consists of three main parts:
- Profits and Losses Report... It reflects all the company's income and expenses, tax payments, income that can be taken into account in future reports, etc. during the reporting period. Read more in the article.
- Statement of financial position... It consists of three sections: assets, liabilities and equity. Assets are everything that a company has - equipment, stocks of finished products and raw materials, cash, buildings, licenses, patents. Liabilities are the debts of the company. Capital is equity, that is, what remains from the difference between assets and liabilities. For example, if a company's assets (factories, equipment, finished products in warehouses) are estimated at 100 million rubles, and its liabilities (in the form of loans) are 30 million rubles, then the company's capital will be 70 million rubles. The statement of financial position is always prepared for a specific date, for example, December 31st. Read more in the article.
- Cash flow statement... This is a kind of cash desk for the company. It shows how much money was received by the company during the reporting period, how much of it and for what purposes it was spent. This report makes it difficult for accountants to falsify data. Read more in the article.
The financial statement also includes Statement of changes in equity... It discloses information about changes in capital for the reporting period, transactions with treasury shares, dividends, etc. Many positions in the report are accompanied by comments, which can contain very useful information. Some companies may use various tricks in order to disguise figures that are undesirable for everyone to see, for example, depreciation of fixed assets. This data is disclosed not in the main report, but in the comments. The report is accompanied by the opinion of an independent auditor confirming the accuracy of the figures presented.
A feature of the formation of civilized market relations is the aggravation of competition, technological changes in production, volumetric information flow, continuous innovations in tax and accounting legislation. In modern conditions, accompanied by the implementation of various approaches to the implementation of the modern policy of operational and strategic management, the use of International Financial Reporting Standards (hereinafter - IFRS) in accounting practice has a significant impact on the formation of financial information about the activities of an enterprise. The use of IFRS is due to the need to further expand the scale of business, to attract investments in various areas National economy country.
The possibility of applying IFRS in Russia is stipulated by the Development Concept accounting and reporting in Russian Federation for the medium term ”, adopted by the Ministry of Finance of the Russian Federation on 01.07.04. After the entry into force in the Russian Federation of IFRS and their Clarifications, it became necessary to update the need to transform the content and sequence of analysis of accounting (financial) statements (hereinafter - financial statements).
However, based on the international approaches tested in practice to the analysis of financial statements formed in accordance with IFRS, organizations (enterprise, firm, company, business entity) should also take into account the domestic experience accumulated in the field of financial statements analysis.
Thus, in accordance with the principles of IFRS, the main purpose of financial reporting is to provide information about the financial position, results of operations and changes in the financial position of the company.
IAS 1 Presentation of Financial Statements, adopted in new edition 2003, establishes the basis for the presentation of financial statements general purpose in order to ensure its comparability both with the financial statements of the enterprise for previous periods and with the financial statements of other enterprises. This standard specifies General requirements on the presentation of financial statements, recommendations for its structure and minimum requirements for its content. At the same time, the standard provides a definition of financial reporting, while paying attention to the fact that these are reports designed to meet the needs of those users who do not have the opportunity to receive reports prepared specifically to meet their specific information needs.
Reflection order cash flows the entity is reflected in a separate standard IFRS 7 "Cash flow statements" (1992).
According to IFRS, the financial statements of companies include the following list of forms:
Balance sheet;
Profits and Losses Report;
Statement of changes in equity;
Cash flow statement;
Notes to the financial statements;
Performance accounting policies.
In addition to the above financial reporting documents, the forms of which are presented in IFRS 1, the standard approves the provision of additional information in the form of financial and economic reviews of management, describing the characteristics of the financial and economic condition of the company for a certain period, an assessment of factors affecting the level of business efficiency as a whole and its financial stability.
Thorough study of the financial statements of the company is the key to successful financial management enterprise based on the application of analysis. In new conditions the financial analysis carried out in enterprises, being part of financial management and audit, is of paramount importance for a wide range of users-owners, managers, investors, analysts and lenders
It should be recalled that the goal analysis of financial statements in accordance with IFRS is to obtain key characteristics financial condition and financial results of the company to form an adequate assessment of the achieved level of business efficiency, identify and quantify the impact of external and internal factors, as well as substantiate current and strategic business plans
The main tasks of the analysis of financial statements include the following:
Study of the composition and dynamics of the financial sources of the organization's activities, including equity and liabilities;
Objective, comprehensive assessment of the optimal structure of the liability balance sheet;
Study of the composition, structure and dynamics of the organization's property with an assessment of the quality of the company's assets;
Analysis of the level of liquidity of assets and solvency of the company;
Assessment of the effectiveness of cash flow management;
Determination of the possible threat of bankruptcy;
Assessment of the level and dynamics of business activity indicators;
Analysis of the composition, structure, dynamics of income, expenses and profits of the company;
Analysis of the level and dynamics of profitability indicators;
Evaluation of the effectiveness of the dividend policy and the use of net profit;
Justification of the investment policy for attracting (placing) capital;
Revealing and quantifying the influence of factors on business performance indicators;
Development of alternative options for optimal management decisions aimed at improving business efficiency.
Analysis of publications by Russian scientists devoted to this problem (M.I.Bakanova, S.B. Barngolts., L.A. Bernstein, A.D. Sheremet, M.V. Melnik, O.V. Efimova, V.V. Kovaleva and others) showed that the fulfillment of the tasks assigned to the Russian accounting should be based on the use of data from financial statements compiled both in accordance with Russian rules and in accordance with IFRS. However, it should be noted that there are excellent approaches to the reflection of information, which are primarily due to different fundamental differences in the formation of the Russian and international regulatory framework designed to regulate the procedure for the formation of financial reporting indicators in the accounting system.
Of course, one of the significant differences between IFRS and RAP is the historical difference in the ultimate uses of the financial information. Thus, financial statements prepared in accordance with IFRS pursue the goal of meeting the information requirements of the owners of the organization and external users (investors, creditors, financial institutions, etc.). Russian financial statements are, in fact, formed for the purposes of controlling authorities. It is this fact that can explain the principles of formation of accounting policies. Russian enterprises, the orientation of which is the fulfillment of the requirements of regulatory documents on accounting, and not the professional judgment of an accountant.
In this regard, we will consider the main approaches to the analysis of financial statements prepared in accordance with IFRS. To this end, let us turn to the most famous foreign researchers in the field of analysis of the financial statements of an organization and determine the procedure for conducting financial analysis, highlighting two main stages in it:
1.Interpretation of financial statements;
2.Calculated analysis of financial statements.
It should be noted that in the international standards FASB (SFAC 5) the term "interpretation" is defined as "... clarify, explain or develop in detail the accounting and reporting standards, supporting their application in accounting policies." In the explanatory dictionary, the word "interpretation" is interpreted as "... interpretation, explanation, clarification of the meaning, meaning of something."
Indeed, when analyzing financial statements, its interpretation helps to assess the real economic situation organizations, and making the information contained in the reporting really valuable and necessary for making competent management decisions. The purpose of the financial statements is to disclose and analyze the main elements of accounting policies, which may lead to the reflection in the published statements of results that may differ from the actual economic situation at the enterprise.
In addition, in connection with the interpretation of the organization's financial statements, the impact on its activities of a number of significant factors can be assessed, including the industry-specific features of the organization's economic activities, business strategy and accounting policies, tools, methods and methods of financial reporting management, the quality of information disclosure in financial statements. , as well as the nature of the relationship between enterprises. Let's consider in more detail the essence of each type of analysis.
When analyzing the impact of industry-specific features of activities organization (industry analysis) compares the results of the company's activities with the established norm, in order to determine the liquidity of the enterprise. Also, industry analysis allows you to study the influence of a firm's strategy and business environment factors on the content of financial statements. Wherein given view analysis provides financial analysts and other users of financial statements, a fairly extensive comparative base, helps the enterprise to develop a kind of benchmark indicators of the organization's performance, with which the current results of operations, financial condition and investment potential enterprises.
When analyzing a business strategy individual items of this section are assessed, as well as research and development, product design, organization of services or processes, production, marketing, sales and organization of customer service). The combination of these components determines the ability of the organization to develop in the future or maintain production at the achieved level, based on the developed strategy of price leadership or differentiation of various kinds.
When analyzing the accounting policies of the organization, which in foreign literature is often called an accounting strategy, first of all, they find out the composition of its structure, content, methods, which largely allows external users of financial statements to receive information about the financial results of the enterprise.
The problem of managing the financial statements of an enterprise seems to be quite relevant. So, in accounting practice, there are two types of technologies for managing the financial reporting of an organization:
Management of the profit and loss statement, the so-called profit management;
Management of the structure of the balance sheet of the enterprise.
This is due to the fact that on financial results businesses can be influenced in several ways. First, when it is possible to significantly affect the financial results of the enterprise for a certain period in the direction of decrease or increase. Secondly, profit can be influenced by income equalization, the purpose of which is to reduce the degree of variability in the indicators of the accounting profit itself. The use of these methods allows the company to indirectly influence certain items of the balance sheet.
For the purpose of managing financial reporting, there are three ways (methods) used to manage the financial reporting of an enterprise, among which the following can be distinguished:
First, the choice of one of the accounting methods, in particular the choice of the method of accrual depreciation charges, the method of estimating inventories, and the choice in relation to the attribution or not attribution of certain expenses to equity, etc.
Second, the choice of accounting estimates, for example, the change in the amount of bad debt adjustments, the inclusion of part of the costs arising from the incomplete use of production capacity in the costs of production, instead of attributing them to the profit and loss account, the use of reserves for the purpose of adjusting the financial result.
Third, making a real decision regarding an operational, investment or financial decision, choosing an alternative option for operations from a set of operations.
Of great importance for analytical purposes is the formation of high-quality financial information, which must be characterized by the required level of disclosure of reliability, must be neutral, must be prudent, analytical in order to make optimal management decisions. An equally important characteristic of financial statements is the quality of their disclosure. Exactly given characteristic allows you to compare different enterprises in such areas as the development of accounting methods and accounting estimates, explanations for significant changes in accounting and the level of their full disclosure. In the process of conducting analytical procedures, the degree of information disclosure can be simultaneously assessed in accordance with the principles and requirements of accounting and IFRS.
When analyzing influence on the financial statements of the nature of the relationship between the enterprises that make up the corporate group, the actual reality of these relationships and the procedure for their reflection in the consolidated financial statements are examined corporate group... This is due to the fact that in a number of cases, accounting may contradict the nature of the relationship between the companies of the group. In addition, the analysis requires determining the presence of all related companies in the consolidated statements of the corporate group and the application of the appropriate accounting methods (consolidation, equity participation or accounting at actual costs) depending on the nature of the relationship.
Upon completion of the interpretation of the financial statements, the organization proceeds to the second stage of its analysis - the calculated analysis of the organization's financial statements. In this case, two main areas should be distinguished:
- identification of potential factors that complicate the process of comparing financial statements;
- calculations and evaluation of the results obtained.
Potential factors that complicate the comparison of financial statements include changes in the time boundaries of the financial year, different reporting dates, changes in the composition and structure of the company, changes in accounting methods, changes in accounting estimates, differences in the presentation of information. Let's look at an example.
1.In particular, enterprises may decide to change the time limits of a particular year for a number of reasons. For example, when the company incurs large losses and in this case, management may increase the financial year from 12 to 15 months, while changing the reporting date. As a result of this change, the large loss is offset by 15-month profit rather than 12 months. In addition, businesses may also set a very short fiscal year when particularly large restructuring losses and costs are taken into account.
2. Companies prepare financial statements for different reporting dates. Differences are observed even within the same industry. For example, various companies in the air transport industry close their accounts on one of the following dates: March 31 - British Airways, KLM, Ryanair; September 31 - EasyJet; December 31 - Australian Airlines, Lufthansa, SAS.
3. In the course of their activities, companies can merge with other companies, acquire their shares, carry out restructuring, as a result of which divisions can be separated into new, legally separate enterprises. At the same time, the growth of a company during its merger or expansion is usually not the result of its natural development, but is associated only with new acquisitions. These changes in the company's activities significantly complicate trend analysis. After the restructuring, the first impression may arise that the position of the company has even improved, although in reality this is not at all the case, it was just that certain types of activities were separated into separate firms.
4. Over time, a company may change not only accounting methods or accounting estimates, but also a company may move from one accounting system or standards to another accounting system. At the same time, such a change can seriously affect the financial results and indicators of the balance sheet, making it difficult not only to compare the data for a company over a longer period of time, but also making the results of comparing indicators across companies less obvious.
5. Differences in the presentation of information can be explained by two points. First, with regard to the articles used in annual reporting... For example, in the reporting of many airlines there are such items as operating profit (British Airways, Ryanair), operating income (KLM, SAS) or the result from operating activities (Australian Airlines, Lufthansa). They seem to sound the same, but in their own way economic content quite significantly differ. Secondly, relatively different ways presentation and location of information. In practice, different companies often use different formats, rather than standardized forms of financial reporting forms (in particular, the balance sheet and profit and loss statement), which greatly complicates the process of their comparison.
Here is a list of the main procedures required for making calculations based on financial reporting data and evaluating the results obtained:
- analysis of the development trend (trend);
- percentage analysis;
- segment analysis;
- analysis based on financial ratios;
- cash flow analysis.
1.When conducting trend analysis, changes in the indicators of financial statements are studied over a certain period of time. Most often, this type of analysis is carried out in five years, although it can be carried out for longer periods, and the number of elements under study will increase accordingly.
2.When percentage analysis the comparative base is the indicators of other organizations, as a rule, of the same industry. To make comparisons with other companies, the size mismatch needs to be addressed. For this, the values of the indicators of the income statement are expressed as a percentage of sales, and the indicators of the balance sheet are expressed as a percentage of the total of all assets. Balances converted for the purposes of percentage analysis allow us, on the one hand, to compare the financing structure of various companies, and on the other, the directions of investment of these resources. Percentage analysis based on the profit and loss statement is advisable to carry out only if the individual items of this statement are comparable.
3. Analysis of information by segment allows you to increase the information content of the results of assessing operating costs in the course of percentage analysis. The information obtained in the course of segment analysis discloses information about the corporate strategy of a certain group of the company and allows to assess the significance of its segments.
4. When analyzed based on financial ratios a detailed study of the financial condition, results financial activities and the investment potential of the organization. The analysis under consideration includes the following main elements:
- assessment of the organization's ability to independently perform undertaken commitments and pay off your debts using solvency, liquidity and financial sustainability;
- assessment of the possibility of doing business, in particular, it is determined whether it brings sufficient income through the application of the return on assets, equity and working capital ratios;
- assessment of the effectiveness of the organization's economic activity (in our understanding - the intensity of resource use) using the turnover ratios of its assets in general and their various types in particular;
- assessment of the attractiveness of this organization for potential investors using coefficients characterizing its position on the securities market.
When conducting analysis based on the coefficients, both one-factor analysis is used, which involves the calculation and comparative assessment of each coefficient separately with subsequent generalization, and multivariate analysis, which is used to predict the likelihood of company bankruptcy (Altman and Tuffler models).
5. Analysis of cash flows (cash flows) is carried out in order to determine the ability of the company to provide excess cash receipts over payments. The information base of the analysis is the statement of cash flows, which includes three sections: information on cash flows for operating (current), investment and financial activities.
Thus, the analysis of the main approaches to the analysis of reporting, formed in accordance with IFRS, methods and technologies used to manage the financial statements of an enterprise, allows us to formulate the following conclusions:
- the process of transition of Russian accounting to IFRS makes it necessary to make appropriate changes to the content and procedures for analyzing the financial statements of Russian organizations;
- when managing financial statements, it is advisable to use accounting methods, accounting estimates and the ability to choose an alternative option for transactions from their totality, defined by IFRS;
- when making changes, it is necessary to take as a basis foreign experience in the analysis of IFRS reporting, which can be supplemented by Russian experience in the field of analysis, which makes it possible to increase the efficiency of using analytical procedures for purposes.
In conclusion, it should be noted that the differences in the disclosure of financial statements for Russian rules and in accordance with IFRS, significantly affect the results of the analysis of financial statements, its management and assessment of the efficiency of enterprises. At the same time, the ongoing processes of improving the domestic system of accounting and financial reporting and its convergence with the International Financial Reporting Standards are aimed, first of all, at the formation of better information on the financial position and financial results of the activities of economic entities in modern conditions of a competitive environment.
ACCOUNTING REFORM
BANK ACCOUNTING
IFRS AND BANKING ANALYSIS
A.B. SUVOROV, candidate economic sciences, Chairman of the Phoenix Association of Accountants and Auditors
The main approaches to the analysis of banking
The most in a simple way analysis of the bank's activities is the analysis of its financial statements. If such financial statements are prepared in accordance with international standards, then, as already mentioned, they contain a large amount of various information about banking activities. Having carefully analyzed the reporting data, you can get a clear idea of the general directions of activity, financial position, asset structure and development prospects of the credit institution. However, those who first encounter this kind of reporting are usually struck by the abundance of data and the complexity of the presentation of the material.
Each group of users of financial statements (shareholders, investors and potential investors, legislators, etc.) seeks to obtain different information about the credit institution. Until recently (and only in cases where it became necessary to present financial statements to a foreign partner), Russian banks were forced to prepare these statements in accordance with the requirements of International Financial Reporting Standards (IFRS). This condition had to be met by all banks seeking to obtain foreign loans... Since the beginning of 2004, all Russian banks must be able to prepare their statements in accordance with the requirements of IFRS, that is, the situation is changing dramatically.
When analyzing the activities of a credit institution, as a rule, first of all, its financial position is analyzed, which is characterized by a system of indicators reflecting the actual availability, placement and use of financial resources. Information for such an analysis is contained both in the internal (unpublished) and in
external (published) statements of the bank, as well as in the data analytical accounting and other documentation.
The balance sheet of a credit institution, on the one hand, reflects the state of its own and borrowed funds, and on the other, their placement and use. So, in the asset of the balance sheet, the funds are grouped by type, composition, placement and use, and in the liability - by the sources of education. In this case, the bank's balance sheet is compiled both for balance sheet and off-balance sheet (off-balance sheet claims and obligations) accounts in accordance with the plan, which is approved The central bank Of the Russian Federation (Central Bank of the Russian Federation). Accounts in the balance sheet of the bank are grouped into sections according to their economic content.
It should be noted that the analysis of the bank's assets and liabilities is the main one in determining its financial stability. This is due to the fact that both the bank's capital adequacy and the level of accepted credit risks depend on the quality of bank assets.
The analysis of assets and liabilities should also be carried out to determine the level of diversification of banking operations and to determine the degree of the bank's dependence on other factors of a general economic nature.
Analysis of the internal accounting and control system
One of the conditions for the recognition of Russian banks by the international banking community is to prepare, as close as possible to international standards, not only general accounting and financial statements, but also internal reporting... All credit institutions must have an internal control system, without which effective management is impossible. banking risks... Internal control should be based on
a solid information base in which accounting is the main, although not the only source of information.
The analysis of internal accounting and control in the bank in the context of the transition to IFRS is extremely important. The financial statements, which are prepared in accordance with international standards, reflect the impact of past and present management decisions. These statements are prepared on the basis of principles that consistently and truthfully try to account for every transaction of the bank.
In addition to drawing up financial statements, internal accounting and control in the bank also includes a set of plans, methods and procedures used to protect assets and liabilities, minimize banking risks and increasing profits, ensuring strict compliance with the instructions of the bank's management.
Internal accounting of a bank is an integral part of internal control and is carried out to analyze its activities. The effectiveness of internal accounting and control depends on the following factors:
delineation of responsibility between individual employees for maintaining accounting records and for the direct management of cash and other inventory; intrabank planning; correspondence of the qualifications of employees to their positions; application unified system numbering of all documents used in the accounting process.
In this regard, for many banks today there is a question of automating the process of internal accounting and control. However, it sometimes takes years to develop effective programs focused on the analysis and support of management decisions, while in the modern world the possibilities of information technology are changing very quickly. The quality of these developments depends not so much on the programs themselves, but on the quality design solutions, the level of qualifications and professionalism of the developers, as well as the technical means used.
Development tasks software products related to the automation of internal accounting and control in banks, are even more complicated in connection with the transition to IFRS. This is primarily due to a significant increase in the number of accounting elements, which in its volume is inadequate for an increase in
the number of characters used. Such a number of accounting elements will require a revision of the entire accounting technology.
Changes in accounting elements, in turn, will require changes in the analysis and improvement of approaches to decision-making in the management of banking processes, i.e. to the development of new strategy accounting policies.
Method of comparative analysis of indicators
In international practice, comparative analysis of indicators is used quite often. It consists in assessing the situation own bank relative to competitors. The analysis of financial indicators in international practice is a necessary tool for determining the position of a bank in accordance with the indicators of its activities relative to competitors. For example, for correct use comparative analysis, the results may indicate a decrease in the competitiveness of this bank in comparison with previous periods or to increase the level credit risk compared to other banks in the region. If used properly, the information obtained can be critical to the success of a bank under all conditions (especially in an unstable economy).
Comparative analysis of indicators should not be limited only to the current period of activity, but have both retrospective and (if possible) perspectival character. Comparing the results obtained by comparative analysis of indicators for different periods, the consultant can help the bank's management get a clearer idea of the direction in which their bank and the Russian banking system are developing, as well as in which area competitors have strategically improved or expanded their activities. This is necessary for the bank in order to take a stable position in the domestic market in the current period and not create precedents for merging with international or local banks and prevent absorption by them. The use of the method of benchmarking indicators is intended to help the bank to navigate well in current trends development of the market for banking operations and services that
can reduce or increase the degree of diversification of the bank's activities in comparison with competitors and affect its strategic position in the financial market.
For a comparative analysis of indicators, one can use information on Western markets for banking products and services obtained from public and private sources. Information about the Russian banking system is becoming more and more accessible, the main analyst of which has been and remains the Bank of Russia. This is due to the fact that foreign rating agencies pay more and more attention to Russian banks. A consultant (or a group of consultants) conducting (or conducting) a benchmarking analysis should (should) constantly be aware of trends, performance results, the state and position of Russian banks. The use of benchmarking obliges consulting or rating firms to regularly conduct their own benchmarking performance of Russian credit institutions.
Such an overview of the results of the benchmarking analysis should be based primarily on international requirements presented to the financial statements of credit institutions. Therefore, information on the structural analysis of financial statements is classified in accordance with IFRS and entered into a comparative database programmed to assess performance indicators. Based on the results obtained, a report is drawn up for the current period. In different regions, the results of banks' activities may differ significantly among themselves, therefore, the information received is subdivided according to the regional basis. The data is carefully checked. Any cut-off values that graphically represent a significant deviation in one direction or another and do not characterize any consistent trend are excluded from the analysis. The current performance is then compared with previous years to identify trends and significant differences. Based on this report, a list of banks is drawn up, which will be the rating of their reliability.
It is important to note that comparative analysis is a generalized version of the standard benchmarking methodology
indicators and tools that are used in international practice. Such an analysis is easiest to carry out by organizations that carry out financial audit of banks' statements in accordance with IFRS.
To conduct a comparative analysis, the following main indicators are used: net interest income, which serves as the basis for assessing the bank's ability to maintain profit received from interest on banking operations after the main expenses have been made - payment of interest on deposits; general reserve for covering losses on loans, which allows you to assess the quality of the bank's loan portfolio; provision for losses on commercial loans, determined based on the total amount of commercial loans, which are often the most significant component of the bank's loan portfolio; the total amount of own funds, which makes it possible to assess the proportion of equity capital in the balance sheet of the bank and characterizes its ability to keep profit at its disposal and increase its own funds; operating income, which shows the efficiency of the bank. It is defined as interest income minus the cost of funds; cash and credit investments, with the help of which it is possible to determine the proportion of liquid assets in the balance sheet of a credit institution; the balance of cash, loans and investments as a percentage of total assets, which reflects the bank's strategy in the field of placing capital in earning assets. Benchmarking indicators can be taken out of scope economic analysis and applied in such areas of assessment of the internal and external environment of the bank as employee satisfaction and availability banking services... It is much more difficult for a bank to obtain information on these types of comparative analysis on its own, therefore, the help of a consultant (or a group of consultants) is used for this purpose. To maintain its competitiveness, diversification and awareness of new trends in the development and implementation of banking products and services, the bank should be able to apply the methodology for comparative analysis of indicators
both in daily activities and in strategic planning.
Bank reliability assessment
An important aspect of banking (especially in connection with the transition to IFRS) is to determine the reliability of a bank. To determine the reliability of a bank in international practice, the standard method of comparative analysis of indicators and instruments is also used, since in accordance with this methodology, recommended by IFRS, the comparative analysis of indicators is one of the most reliable ways to determine the reliability of a bank. The fact is that the risk inherent in all banking operations carries with it the potential opportunity to receive additional financial income for a bank that is functioning more successfully than its competitors. A successful bank can be called not only a bank whose activity is characterized by a positive profitability ratio, but also a bank whose profitability ratio is higher or at the same level as compared to banks actively competing in the same sector of the financial market.
In international banking practice, there is a number of classical canons for analyzing the reliability of banks, but their application in Russian conditions turns out to be extremely problematic for the following main reasons:
almost all Russian banks are quite small (by world standards) and critical indicators reliability are different quantitative characteristics(assets, equity capital, size of the authorized capital, profit, overdue debt on loans, and some others.);
some of the relative characteristics, which are given great attention in Western methods, are less significant in Russian conditions. The analysis of the largest ten Russian banks, carried out in accordance with the recommended IFRS methods, showed that they have a stable financial position regardless of the state of the mentioned relative indicators... Improvements and deterioration in the work of medium and small banks, in turn, also practically do not correlate with the state of
relative indicators. The lack of influence of relative indicators was especially convincing in the case of small banks. Statistics showed that the smaller the bank, the higher the capital adequacy ratios and, therefore, the more reliable the bank; in foreign practice, unlike in Russia, great importance is attached to information about the dynamism of the bank (growth rates, strategic objectives of the founders, the qualifications of the management team and their reputation in the business community, the volume of investments in technical equipment, the level of personnel competence, etc.); in Russia, as a rule, there is no practice of confirming formal information with information gleaned from informal sources. In developed countries, the system for assessing the reliability of banks has been taking shape for more than a decade. Its use in practice requires a certain level of qualification of supervisors. When using any technique, the results of the analysis will always be subjective to one degree or another. Therefore, the higher the qualifications of the consultants, the richer and more versatile their experience in banking, the more accurate will be the conclusions made by them in the analysis of the bank's activities.
It is customary to calculate the reliability of banks in Western countries using a point system. For some banks, a high degree of reliability, as a rule, excludes the intervention of supervisors, since it is believed that the bank itself is able to overcome any (both internal and external) negative trends. But there are other banks for which the intervention of the supervisory authorities in terms of control over certain aspects of their activities has been recognized as necessary. Still others require such intervention across a range of activities, and supervisors are obliging these banks to develop action plans to address identified deficiencies. To help the fourth banks, supervisors include financial rehabilitation of the founders in the system of measures. For the fifth, the only way out of this situation may be the reorganization of the bank in order to prevent its bankruptcy and liquidation. This differentiation of the relationship between supervisors and banks allows them, without attracting the attention of the public and clients, to make all mechanisms work,
contributing to ensuring their reliability, and hence the stability of the entire banking system generally.
Analysis of assets and liabilities
An important element banking analysis methodology is the analysis of assets and liabilities.
The main objectives of the analysis of bank assets are:
determination of the share of working (income-generating) assets in the balance sheet and their ratio;
determination of the structure of the loan portfolio, including loan investments and other assets for all branches of the bank. When establishing the main objectives of the analysis of the assets of a credit institution, one should proceed from the fact that the assets of the balance sheet, in terms of their economic content, are subdivided into bringing (working) and non-generating (non-working) income. Non-income generating assets may include cash on hand, on correspondent accounts, on an account required reserves Bank of Russia, as well as fixed assets, materials and diverted funds at the expense of the bank's profits. The rest of the assets are classified as employees, namely:
all transactions with the bank's clientele credit system(issuing loans to banks and other financial institutions, lending real sector economy, private lending, etc.); transactions with non-residents; operations with securities (with the exception of those acquired for the purpose of participating in the activities of other enterprises);
leasing operations, documentary operations, etc.
To account for working assets, credit accounts are used, as well as accounts on which provided interbank loans, purchased securities and correspondent accounts with other banks (NOSTRO accounts) are recorded.
The division of assets into working and non-working is necessary to determine the profitability of the bank. According to experts, the optimal level of non-performing assets should be no more than 20% of the total assets.
It should be noted that in accordance with IFRS, when assessing bank assets, it is used
capital adequacy criterion, which is assessed as the ratio of fixed capital to risk-weighted assets.
Let's give the following example. In accordance with the presented balance sheet, the amount of commercial loans issued by the bank is 80% of total amount assets, and the total amount of assets exceeds the amount share capital 12 times. In this situation, an excess of the total amount of assets in relation to the amount of shareholders' funds by 12 times indicates that the bank may be experiencing a lack of capital. If this bank intends to expand its activities and continue issuing loans, its capital must be increased. Based on the international standards established by the Basle Agreement, this bank it can be recommended to maintain a capital-to-risk-weighted ratio of 8%.
This example illustrates the use of the capital adequacy criterion. The value of this criterion should be within 4 - 8%. As a rule, this standard is fulfilled Russian banks"with a margin". A very large margin indicates the ability of the credit institution to increase the volume of active operations with different levels of risk. The approach of the capital adequacy level to the standard indicates, as has already been illustrated by the example, the need for either increasing capital or restructuring the portfolio towards less risky assets.
In the practice of off-site supervision of the activities of credit institutions, the N1 standard of Instruction No. 1 is used, the analogue of which in the World Bank methodology is the Cook coefficient. With their help, the quality of assets is taken into account, depending on the type of operation.
Another criterion used in the analysis of the assets of a credit institution in accordance with the requirements of IFRS is liquidity risk.
To illustrate liquidity risk, let us give one more example. Suppose that, in accordance with the balance sheet presented, the ratio of the amount of loans and deposits of the bank is 90%, which makes us think about some riskiness of the operations carried out by the bank in question. Let us also assume that 20% of all bank deposits are "demand" deposits, then-
the remaining 20% are three-month deposits, and the remaining 50% are deposits with a maturity of three to six months.
According to the structure of the loan portfolio, 10% of the bank's loans must be repaid within three months, while the remaining 70% of loans have a maturity of three to six months.
Generally in our country after the maturity date large percentage time deposits are rolled over. However, this trend can be assessed as positive only after analyzing the data of the previous period, which will make it possible to make sure that such a trend has indeed existed in this bank for a long time.
In addition, it is necessary to analyze the structure of the bank's liquid assets (cash, precious metals, government securities, etc.), which will require Additional Information... However, if the amount of loans is 90% of the amount of deposits, and the loan provision increases, ™ it is highly unlikely that the bank has significant liquid assets. This means that in the event of a liquidity crisis, the bank will have to deal with its own financial difficulties due to interbank loans, which is often not only unprofitable, but also risky. The conclusion suggests itself: this bank is subject to significant liquidity risk.
The value of assets maintained at the proper level allows the credit institution to simultaneously ensure the safety of clients' funds, which is an undoubted source of its economic growth. With a more in-depth analysis of the bank's assets, their market value(for example, for the purpose of selling or purchasing them).
The main sections of the balance sheet liability are:
statutory and reserve funds; economic incentive fund; funds for social and industrial development, which reflect the bank's own funds.
To account for the bank's own funds, such passive accounts are intended, which reflect the bank's operating income, deferred income, reserve funds for possible loan losses and for the depreciation of securities. The rest of the passive balance accounts are intended for accounting
that attracted resources, which should include:
settlement and current accounts of clients; time deposits; deposits of citizens;
marketable debt received from other banks; interbank loans; funds on correspondent accounts of other banks.
The main tasks of the analysis of the bank's liabilities is to determine the following parameters:
the ratio of the bank's own and borrowed funds, as well as the degree of dependence on the interbank loan market; share of stable balances on demand accounts;
terms of use of attracted funds;
resource structure in terms of existing branches.
Analysis of reserves
From the point of view of the requirements of IFRS, an important criterion for assessing the financial stability of a credit institution is the size of the reserve. The fact is that an increase in the size of the reserve by the amount possible losses on loans raises a number of questions that need to be answered in the analysis process. First of all, you should find out whether the quality of the analysis carried out prior to the issuance of a loan has not decreased. To answer this question, it is often enough to find out whether there have been any changes in the composition of the board of directors or leading specialists in the lending department.
Then you need to determine the share of overdue loans (principal) and interest. After that, you should collect information about financial difficulties borrowers of the bank and find out whether the financial position of shareholders affects the activities of the bank. Finally, it is necessary to get an answer to the question of whether the increase in the provision is the result of the concentration of loans.
To determine the profitability of lending operations, it is necessary to compare the increase in the amount of the provision with the net margin of the credit institution. If the amount received exceeds the amount of the net interest margin, then the loss on the bank's lending operations (in accordance with the requirements of IFRS) is reflected in the financial statements.
However, such an analysis of the profitability of a bank's lending operations can only be made after determining the corresponding administrative costs.
If the bank's assets are ranked according to the degree of their liquidity decreasing, and liabilities - according to the degree of their stability increase, then, as a result, it is possible to build a model that will allow assessing the assets and liabilities of a credit institution from the standpoint of ensuring liquidity and limiting risks.
Financial stability analysis
Analysis of the financial stability of a credit institution is a very effective technique used in restructuring. A bank, whose employees are able to understand the intricacies of financial statements prepared in accordance with IFRS requirements, and are proficient in the analysis methodology, has significant advantages over its competitors.
The analysis of the financial stability of a credit institution can be carried out in other cases (for example, for insurance or tax purposes).
commercial activity constantly
encourages the bank's management to assess the final results in order to timely identify the most important problems and ensure the achievement of the goals of investors and clients while maintaining an acceptable level of risk. The new accounting methodology, which is widely implemented in credit institutions, is as close as possible to international standards, in much to a greater extent, in comparison with the previous one, is focused on assessing the bank's profitability as the basis for its reliability and stability in the future.
In conclusion, it should be noted that when using financial statements prepared in accordance with the requirements of IFRS for the purpose of managing a bank, first of all, it is necessary to carefully analyze all the information contained in it in order to link all the components into one whole and obtain complete presentation about the financial position of the bank. The bank's management needs to think carefully about what information should be disclosed so that the prepared reporting not only meets the requirements of international standards, but also gives a clear and true view of the bank's activities.
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RESEARCH
Maslova Yu.N. 1
1 Volgograd State Technical University
The impact of differences between IFRS and RAS on the analysis of an organization's financial statements
ANNOTATION:
The main goal of this study is to identify the impact of differences between IFRS and RAS on the analysis of financial statements. Russian system accounting and reporting is characterized by a rigid system regulation carried out on state level... Russian reporting of organizations is aimed at minimizing taxes, reporting in accordance with IFRS - to meet the interests of investors. The report, compiled in accordance with IFRS, well discloses the economic activities of the company for the reporting period, serves as the main source of indicators for financial analysis.
KEY WORDS: globalization, IFRS, RAS, financial reporting, financial analysis
JEL: C58, G00, F65 FOR QUOTATION:
Maslova Yu.N. Implementation The impact of differences between IFRS and RAS on the analysis of the financial statements of the organization // Economics, Entrepreneurship and Law. - 2016. - 6 (1). - c. 25-36. - doi: 10.18334 / epp.6.1.35182
Maslova Yulia Nikolaevna, 4th year student of the Faculty of Economics and Management, Volgograd State Technical University ( [email protected])
PUBLIC ACCESS: http://dx.doi.Org/10.18334/epp.6.l.35182
(c) Maslova Yu.N. / Publication: Creative Economy Publishing House LLC
This article is distributed under the Creative Commons CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/) PUBLICATION LANGUAGE: Russian
Introduction
In connection with the intensification of the process of globalization of the world economic system Russia, by reforming the economic sector, was moving towards the implementation of IFRS1. After Russia's accession to the WTO, the integration process accelerated. One of the main problems in the economy of the Russian Federation is the problem of overcoming the differences between IFRS and RAS2 in the principles of accounting and the purposes of presenting financial statements.
The relevance of studying the differences between IFRS and RAS that affect the analysis of financial statements is due to the fact that financial statements, as a mirror, reflect the results of the enterprise. Analysis of the financial condition of the enterprise allows you to assess whether a business entity is able to finance its production activities, constantly maintain its solvency, liquidity and investment attractiveness The process of successful functioning of an economic entity is an interconnected, balanced and multi-structural system. The main task of the financial analyst and manager is a reliable assessment of the assets and liabilities of the enterprise at the reporting date, carried out by analyzing the financial statements. The analysis of financial statements should be based on real, reliable data on the activities of the enterprise. American science fiction writer, journalist and literary critic Bruce Sterling argues that "information alone is not power, otherwise the most powerful people in the world would be librarians." Financial statements represent the final result of financial and economic activities economic entity... Therefore, based on the data presented in it, internal and external users make economic decisions.
The main goal of this study is to identify the impact of differences between IFRS and RAS on the analysis of financial statements.
1 International Financial Reporting Standards (IFRS; IFRS eng. International Financial Reporting Standards) - a set of documents (standards and interpretations) that regulate the rules for the preparation of financial statements required by external users for their adoption economic solutions in relation to the enterprise.
2 Russian standards accounting adopted throughout the Russian Federation, consist of various federal laws and special provisions on accounting, developed and adopted by Russian government agencies.
To achieve the goal, it is necessary to solve the following tasks:
1) highlight significant differences in the principles and purposes of presenting financial statements in accordance with RAS and IFRS;
2) determine the impact of the identified differences on the analysis of financial statements;
3) draw conclusions based on this study.
The subject of the research is the mechanism of drawing up financial
reporting based on IFRS and RAS, identifying differences that affect the subsequent analysis of financial statements. The object of the research is financial statements and their assessment in accordance with domestic and foreign legislation.
The theoretical and methodological basis of the study was the works of Russian and foreign scientists in the field of economics, finance and accounting. The problem of applying IFRS in Russia is touched upon in the works of M.I. Bakanova, V.V. Bocharova, A.B. Vengerova, A. Damodarana, M.M. Karelina, N.A. Nikiforova, N.P. Radkovskaya, M.V. Romanovsky, E.R. Rossinskaya, L.K. Tereshchenko, Yu.A. Sokolova, E.S. Stoyanova, K. Walsh, A.D. Sheremet and others.
International Financial Reporting Standards (IFRS) are a set of documents (standards) that regulate the rules for the preparation of financial statements that are necessary for external and internal users to make economic decisions in relation to an enterprise. The list of organizations that present and publish financial statements in accordance with IFRS is annually expanding. According to paragraph 1 of Art. 2 Federal law dated July 27, 2010 No. 208-FZ "On Consolidated Financial Statements", financial statements in accordance with IFRS are prepared by:
2) insurance organizations (excluding insurance medical organizations carrying out activities exclusively in the field of compulsory health insurance);
3) non-state pension funds;
4) management companies of investment funds, mutual funds and non-state pension funds;
5) clearing organizations;
6) federal state unitary enterprises the list of which is approved by the Government of the Russian Federation;
7) open joint stock companies whose shares are in federal ownership and the list of which is approved by the Government of the Russian Federation;
8) other organizations whose securities are admitted to organized trading by including them in the quotation list.
RAS (Russian Accounting Standards) is a set of norms of the federal legislation of Russia and the Accounting Regulations (PBU) that regulate accounting rules.
An increasing number of Russian enterprises need to prepare financial statements not only in accordance with Russian accounting rules, but also in accordance with international standards. Understanding the fundamental differences between RAS and IFRS will allow the company to switch to accounting in accordance with international standards at minimal cost, as well as to analyze financial statements in the best quality. The main differences between IFRS and RAS that affect the analysis of an organization's financial statements are presented in Table 1.
Table 1
The main differences between IFRS and RAS
Comparative indicator of RAS IFRS Assessment of the impact on the analysis of financial statements
Purposes of using financial information Reflection of property status Reflection of the real financial position of IFRS has a higher degree of compliance with the real state of affairs of information in the reporting
The basic principle of asset recognition Availability of supporting documents Possibility of obtaining economic benefits from the object In RAS, an unlikely receivable can be recognized as assets, which will distort the subsequent financial analysis
Cost of fixed assets The amount of actual costs is recognized. Discounting Recognized in the reporting at cost. If the payment for fixed assets is postponed for a significant period The absence of discounting distorts the objectivity of reporting under RAS,
when determining the initial cost of fixed assets is not applied. time, the initial cost of fixed assets is equal to the present value of future payments. however, it increases reporting indicators: accounts receivable, profits, and so on
Recognition of expenses Expenses are recognized in the accounting, if a contract is concluded, documentary evidence is required Expenses are recognized on the basis of conformity. No documentary evidence is required. IFRS reporting is based on information of a higher quality than RAS. However, the data on expenses in RAS are reliable, as there is documentary evidence.
Revenue recognition condition Income from ordinary activities recognized in financial statements based on legal confirmation (agreement or other document) Revenue recognition is associated with the moment of transfer of significant risks and rewards arising from the possession of the goods The moment of transfer of significant risks and rewards arising from the ownership of the goods, in general, may differ from the date of transfer of ownership indicated in the contract (or other document)
The equation balance sheet Assets = Liabilities Assets - Liabilities = Equity The effectiveness of the organization under IFRS is assessed by making a profit. RAS allows for both profit and loss.
Inflation adjustment RAS statements are compiled without inflation adjustment Non-monetary balance sheet items should be recalculated for inflation in case of hyperinflation Analysis of IFRS data gives a more realistic picture of the state of affairs in the organization
The differences between IFRS and RAS are due to the historical purpose of the use of financial information. IFRS
aims to reflect the real financial position of the enterprise, RAS - the property status. The main users of financial statements prepared in accordance with IFRS are investors and financial institutions. The preparation of Russian financial statements primarily pursues fiscal goals, this information is necessary tax authorities, statistics authorities.
Russian reporting of organizations is aimed primarily at minimizing taxes. IFRS - aimed primarily at satisfying the interests of investors and other users who are not associated and do not have access to reporting. It is the interests of investors that largely reflect the needs of other users. Since they are the providers of capital and, to a greater extent, do not influence the decisions made on the preparation of reports. Therefore, meeting their needs will also help meet the needs of other users.
RAS is quite tightly connected with the legislative and regulatory framework in the Russian Federation, and IFRS are supranational standards, independent of the laws. On practice financial statements requirements-driven tax legislation, contains often distorted financial information, on the basis of which it is difficult to determine the real capitalization of the organization and to establish its actual financial position. And this, in turn, does not at all contribute to the inflow of investments into Russian economy, increases the price of incoming capital and, therefore, negatively affects the expansion tax base.
However, this does not mean that IFRS is fully capable of reflecting the real financial condition of an enterprise that meets all the requirements of users, while RAS is not capable. This is evidenced by the practice of their application. Distortion and falsification are present in both IFRS and RAS. Consequently, without control and responsibility for compliance with certain rules, it is impossible to implement both IFRS and RAS.
As can be seen from Table 1, the main principle for recognizing assets in accordance with IFRS is “the possibility of obtaining economic benefits from an object”, in RAS - “availability of supporting documents”. If
the company acquires a fixed asset with a deferred payment, then in accordance with IAS 16 "Fixed Assets", the initial cost of such fixed asset is formed at a discount, since in fact the organization made the purchase cheaper. The choice of the discount rate is subject to professional judgment. RAS does not use the principle of discounting and determine the initial cost of an object at the nominal value of payments. The absence of such a method distorts the objectivity of RAS reporting, but increases such reporting indicators as receivables, profit and so on. Unlike IFRS, RAS does not establish that “assets” are acquired for the purpose of obtaining economic benefits (profits) and that economic transactions recorded in financial accounting as income and expenses must meet the definition of the elements “income”, “expenses”, and each of them is also at the same time defining the element "assets", since expenses are carried out with the aim of making a profit in the future (economic benefit due to the excess of income over expenses).
Another fundamental difference is the recognition of costs. The conformity requirement that expenses are recognized in the period of expected income is central to IFRS. Expenses are recorded as they become due, not when money is paid or received. Consequently, there may be accumulations in the financial statements (when expenses have already been incurred, and the corresponding amounts are not yet payable and prepaid, when the amounts have already been paid or liabilities have been recorded, even if the costs associated with them relate to the subsequent reporting period). PBU 10/99 "Organization expenses" includes additional condition that the expense is recognized in the accounting, if an agreement is concluded. That is, unlike IFRS, the expense cannot be recognized only on the basis of the professional judgment of the accountant about the decrease in economic benefits and must be documented. For example, the costs of bonuses to employees. As a rule, year-end bonuses are approved in May-June of the next year. In Russian accounting, costs are reflected after the accrual of premiums, that is, in the cost of the next reporting period. Consequently, financial statements under IFRS reflect financial results more realistically than under RAS.
The condition for the recognition of revenue in accordance with PBU 9/99 is the approach in which income from ordinary activities is recognized in the financial statements based on specific legal confirmation (agreement or other document). IAS 18 links the recognition of revenue to the moment of transfer of significant risks and rewards of ownership. The specified moment may differ from the date of transfer of ownership, indicated in the contract (or other document). The main differences in revenue recognition in accordance with RAS and IFRS are presented in table 2, compiled on the basis of RAS 9/99 "Income of the organization" and IFRS 18 "Revenue".
table 2
Differences in revenue recognition in IFRS and RAS
Comparative indicator of RAS IFRS
Revenue recognition There is confidence that an increase in economic benefit will occur. The amount of revenue can be determined. The perceived economic benefit is likely to be realized. The total contract revenue can be measured reliably.
The moment of recognition of revenue Revenue is recognized when there is a transfer of ownership on the basis of specific legal confirmation (agreement or other document). Revenue is recognized when there is a transfer of significant risks and rewards of ownership.
Assessment of revenue The amount of revenue is determined based on the price specified in the contract. fair value the refund received, taking into account the presented trade discounts and rebates
Legal regulation Different types of transactions are regulated by one regulation(PBU 9/99) Various types of operations are regulated based on general principles
Recognition of the shareholder's contribution as revenue Contributions of the LLC members that are not formalized as contributions to the authorized capital or contributions to property are recognized as the income of the organization Contributions received from existing shareholders are not recognized either as income or as revenue
