Due to the adoption of the Resolution of the Ministry of Finance of the Republic of Belarus No. 61 dated December 26, 2022 “On Accounting of Exchange Rate Differences”, which approved the National Accounting Standard “Effect of Changes in Foreign Exchange Rates” (NAS No. 61), the previously effective procedure established by NAS No. 69 has become invalid.
One of the important changes introduced by the new standard is the following provision (p. 5 of NAS No. 61):
Value of a monetary asset (other than cash) or a monetary liability at the date of partial redemption denominated in the foreign currency is translated to the redeemable portion.
It should be recalled that the previous procedure did not regulate the amount of revalued debt as at the date of a transaction or as at the reporting date for partial repayment, so many organizations revalued all existing debt as at the date of the transaction. If this mechanism is applied in 2022, such organizations should account exchange rate differences differently starting from 2023. Let us consider how exactly by way of example.
Example: As of January 1, 2023, the organization has payables to a non-resident for the supplied materials in the amount of USD 100. On January 5, 2023, a new batch of materials at the cost of USD 20 is being purchased. On January 10, 2023, a payment is made to a non-resident in the amount of USD 50. The balance of payables is USD 70 as of January 31, 2023. Payables to a non-resident supplier are monetary obligations, since they involve the transfer of funds. Accordingly, such debt is being revalued.
Let us consider the accounting treatment of exchange rate differences effective in 2022 for revaluation of existing debt in full amount as of the date of the transaction and the new treatment established by NAS No. 61 as of 2023.
1) The procedure effective in 2022 – NAS No. 69
Date | Transaction | Exchange rate of the National Bank of the Republic of Belarus (conditional indicator) | Debit | Credit | Amount (BYN) |
January 1, 2023 | Balance on credit side of account 60 as at January 1, 2023 – USD 100 (100*2.5481) | 2.5481 |
|
| 254.81 |
January 5, 2023 | Receipt of materials at the cost of USD 20 (20*2.5741) | 2.5741 | 10 | 60 | 51.48 |
January 5, 2023 | Exchange rate differences (revaluation of payables at the date of business transaction) (100*(2.5741-2.5481) | 2.5741 | 91-4 | 60 | 2.6 |
January 10, 2023 | Partial payment in the amount of USD 50 (50*2,6010) | 2.6010 | 60 | 52 | 130.05 |
January 10, 2023 | Exchange rate differences (revaluation of payables at the date of business transaction) (120*(2.6010-2.5741) | 2.6010 | 91-4 | 60 | 3.23 |
January 31, 2023 | Exchange rate differences (revaluation of payables at the end of the month) (70*(2.6149-2.6010) | 2.6149 | 91-4 | 60 | 0.97 |
January 30, 2023 | Balance on credit side of account 60 as at January 31, 2023 (70*2.6149) | 2.6149 |
|
| 183.04 |
2) Procedure effective in 2023 NAS No. 61
Date | Transaction | Exchange rate of the National Bank of the Republic of Belarus (conditional indicator) | Debit | Credit | Amount (BYN) |
January 1, 2023 | Balance on credit side of account 60 as at January 1, 2023 – USD 100 (100*2.5481) | 2.5481 |
|
| 254.81 |
January 5, 2023 | Receipt of materials at the cost of USD 20 (20*2.5741) | 2.5741 | 10 | 60 | 51.48 |
January 10, 2023 | Partial payment in the amount of USD 50 (50*2.6010) | 2.6010 | 60 | 52 | 130.05 |
January 10, 2023 | Exchange rate differences (in redeemable part) (50*(2.6010-2.5481) | 2.6010 | 91-4 | 60 | 2.64 |
January 31, 2023 | Exchange rate differences (revaluation of payables at the end of the month) (50*(2.6149-2.5481)+20*(2.6149-2.5741)) | 2.6149 | 91-4 | 60 | 4.16 |
January 31, 2023 | Balance on credit side of account 60 as at January 31, 2023 (70*2.6149) |
|
|
| 183.04 |