Russian invasion of Ukraine and Russian sanctions

The Russian invasion of Ukraine alongside the imposition of international sanctions, have a pervasive economic impact with resulting accounting implications.

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Latest publications

19 May 2022 | Updated 12 October 2022

FAQ 4.7.11 – What factors should be considered in fair valuing equity securities issued by Russian entities that are traded on the Moscow stock exchange at 31 March and 30 June 2022?

On the invasion of Ukraine, the Moscow stock exchange closed for approximately one month, from 25 February 2022 to 23 March 2022.

UK In depth INT2022-05

Info

19 May 2022

FAQ 9.4.3 - If a company decides to pay salaries to employees unable to work, when should the expense related to these payments be recognised?

Companies may choose to continue to pay salaries and benefits to employees even if they are unable to work due to the temporary closure of operations or because they have been physically displaced. Considering that the employees will not be rendering services during this period, when should the expense related to these payments be recognised?

UK In depth INT2022-05

Info

28 April 2022

FAQ 3.3.2 - What are the implications in the significant influence assessment of an entity that decides to remove directors from the board in the context of the Russian invasion of Ukraine?

Aside from restrictions imposed by governments, a growing number of multinational entities have decided to withdraw from business interests they have in Russia. As part of the process, they may remove themselves from the board of directors of the business in Russia.

UK In depth INT2022-05

Info

28 April 2022

FAQ 3.3.3 – What are the implications in the significant influence assessment of an entity that is required to remove directors from the board in the context of the Russian invasion of Ukraine?

As a consequence of legislation imposed by the Russian government​​​​, a multinational entity may be required to remove their appointed directors from the board of the entity in Russia and it will not have the right to reappoint replacement directors. 

UK In depth INT2022-05

Info

28 April 2022

FAQ 9.1.1 – Are penalties arising on the termination of a contract in the scope of IAS 37 or IFRS 9?

As a result of a decision made by some businesses to exit operations in Russia or to suspend business activities in Ukraine, contracts with the counterparties located in Russia may be terminated early. In order to determine the appropriate accounting implications, it is important to understand the specific contract terms. 

UK In depth INT2022-05

Info

28 April 2022

FAQ 9.4.2 - How should change in settlement of equity awards to Russian employees be accounted for?

A multinational group, with its holding company domiciled in Europe, has operations in a number of different countries, including Russia. The group has an existing deferred bonus plan in terms of which employees of group entities are awarded shares in the listed holding company, after completing a defined period of service. The scheme has historically been accounted for by the consolidated group as an equity-settled share-based payment scheme.

UK In depth INT2022-05

Info

22 April 2022 | Updated 12 October 2022

FAQ 4.3.3 – Are government bonds that are denominated in USD or Euro, and issued by the government of Russia and held by foreign investors who are impacted by the sanctions, credit impaired under IFRS 9 as at 31 March and 30 June 2022?

There are a wide range of sanctions and restrictions that have been introduced against Russia, and counter-sanctions by Russia, many of which impact the accounting treatment of financial instruments, including government bonds issued by Russia.

UK In depth INT2022-05

Info

22 April 2022

FAQ 4.7.10 – What are the implications of the Russian invasion of Ukraine on the measurement of Russian bonds that are held at fair value?

IFRS 13 defines ‘fair value’ as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

UK In depth INT2022-05

Info

22 April 2022 | Updated 12 October 2022

FAQ 13.2.2 – What are the relevant considerations when translating foreign operations with a Rouble functional currency into another currency for consolidation purposes?

Where foreign activities are undertaken through foreign operations, the financial statements of those foreign operations are translated so that they can be included in the reporting entity’s financial statements by consolidation or the equity method.

UK In depth INT2022-05

Info

22 April 2022 | Updated 07 December 2023

FAQ 13.1.1 – What are the factors to consider in light of sanctions on the Russian Central Bank when determining the spot rate for the Rouble under IAS 21?

The introduction of sanctions and restrictions on Russia has resulted in significant volatility in the exchange rates for the Rouble. In particular, the restrictions against the Central Bank of the Russian Federation (‘the Russian Central Bank’) are likely to limit the ability of Russia to stabilise the exchange rate of the Rouble, and they might impact the ability to exchange Roubles for other currencies. For example, as of 1 March 2022, the European Central Bank (‘ECB’) had suspended the publication of its Euro-Rouble exchange rate.

UK In depth INT2022-05

Info

22 April 2022 | Updated 12 October 2022

FAQ 4.10.2 – Are government bonds that are denominated in USD or Euro, and issued by the government of Russia and held by foreign investors who are impacted by the sanctions, impaired under IAS 39 as at 31 March and 30 June 2022?

There are a wide range of sanctions and restrictions that have been introduced against Russia, and counter-sanctions by Russia, many of which impact the accounting treatment of financial instruments, including government bonds issued by Russia.

UK In depth INT2022-05

Info

Latest publications

19 May 2022 | Updated 12 October 2022

FAQ 4.7.11 – What factors should be considered in fair valuing equity securities issued by Russian entities that are traded on the Moscow stock exchange at 31 March and 30 June 2022?

On the invasion of Ukraine, the Moscow stock exchange closed for approximately one month, from 25 February 2022 to 23 March 2022.

In summary...

More Less

UK In depth INT2022-05

19 May 2022

FAQ 9.4.3 - If a company decides to pay salaries to employees unable to work, when should the expense related to these payments be recognised?

Companies may choose to continue to pay salaries and benefits to employees even if they are unable to work due to the temporary closure of operations or because they have been physically displaced. Considering that the employees will not be rendering services during this period, when should the expense related to these payments be recognised?

In summary...

More Less

UK In depth INT2022-05

28 April 2022

FAQ 3.3.2 - What are the implications in the significant influence assessment of an entity that decides to remove directors from the board in the context of the Russian invasion of Ukraine?

Aside from restrictions imposed by governments, a growing number of multinational entities have decided to withdraw from business interests they have in Russia. As part of the process, they may remove themselves from the board of directors of the business in Russia.

In summary...

More Less

UK In depth INT2022-05

28 April 2022

FAQ 3.3.3 – What are the implications in the significant influence assessment of an entity that is required to remove directors from the board in the context of the Russian invasion of Ukraine?

As a consequence of legislation imposed by the Russian government​​​​, a multinational entity may be required to remove their appointed directors from the board of the entity in Russia and it will not have the right to reappoint replacement directors. 

In summary...

More Less

UK In depth INT2022-05

28 April 2022

FAQ 9.1.1 – Are penalties arising on the termination of a contract in the scope of IAS 37 or IFRS 9?

As a result of a decision made by some businesses to exit operations in Russia or to suspend business activities in Ukraine, contracts with the counterparties located in Russia may be terminated early. In order to determine the appropriate accounting implications, it is important to understand the specific contract terms. 

In summary...

More Less

UK In depth INT2022-05

28 April 2022

FAQ 9.4.2 - How should change in settlement of equity awards to Russian employees be accounted for?

A multinational group, with its holding company domiciled in Europe, has operations in a number of different countries, including Russia. The group has an existing deferred bonus plan in terms of which employees of group entities are awarded shares in the listed holding company, after completing a defined period of service. The scheme has historically been accounted for by the consolidated group as an equity-settled share-based payment scheme.

In summary...

More Less

UK In depth INT2022-05

22 April 2022 | Updated 12 October 2022

FAQ 4.3.3 – Are government bonds that are denominated in USD or Euro, and issued by the government of Russia and held by foreign investors who are impacted by the sanctions, credit impaired under IFRS 9 as at 31 March and 30 June 2022?

There are a wide range of sanctions and restrictions that have been introduced against Russia, and counter-sanctions by Russia, many of which impact the accounting treatment of financial instruments, including government bonds issued by Russia.

In summary...

More Less

UK In depth INT2022-05

22 April 2022

FAQ 4.7.10 – What are the implications of the Russian invasion of Ukraine on the measurement of Russian bonds that are held at fair value?

IFRS 13 defines ‘fair value’ as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date.

In summary...

More Less

UK In depth INT2022-05

22 April 2022 | Updated 12 October 2022

FAQ 13.2.2 – What are the relevant considerations when translating foreign operations with a Rouble functional currency into another currency for consolidation purposes?

Where foreign activities are undertaken through foreign operations, the financial statements of those foreign operations are translated so that they can be included in the reporting entity’s financial statements by consolidation or the equity method.

In summary...

More Less

UK In depth INT2022-05

22 April 2022 | Updated 07 December 2023

FAQ 13.1.1 – What are the factors to consider in light of sanctions on the Russian Central Bank when determining the spot rate for the Rouble under IAS 21?

The introduction of sanctions and restrictions on Russia has resulted in significant volatility in the exchange rates for the Rouble. In particular, the restrictions against the Central Bank of the Russian Federation (‘the Russian Central Bank’) are likely to limit the ability of Russia to stabilise the exchange rate of the Rouble, and they might impact the ability to exchange Roubles for other currencies. For example, as of 1 March 2022, the European Central Bank (‘ECB’) had suspended the publication of its Euro-Rouble exchange rate.

In summary...

More Less

UK In depth INT2022-05

22 April 2022 | Updated 12 October 2022

FAQ 4.10.2 – Are government bonds that are denominated in USD or Euro, and issued by the government of Russia and held by foreign investors who are impacted by the sanctions, impaired under IAS 39 as at 31 March and 30 June 2022?

There are a wide range of sanctions and restrictions that have been introduced against Russia, and counter-sanctions by Russia, many of which impact the accounting treatment of financial instruments, including government bonds issued by Russia.

In summary...

More Less

UK In depth INT2022-05

SHOW MORE SHOW LESS

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