Rules for Revaluation of Currency Account Balances in the Assets and Liabilities of Banks of the Republic of Uzbekistan in the Multi-Currency Accounting System

Approved by
Resolution No. 363 of the Board of the Central Bank of the Republic of Uzbekistan dated October 24, 1997

Registration Details
Registered by the Ministry of Justice of the Republic of Uzbekistan on November 16, 1998, Registration No. 535

Effective Date
November 16, 1998

Status
Lost legal force on August 13, 2019

Categories:

1. Legislation on Finance and Credit. Banking Activity / Banking Activity / Accounting and Reporting in Banks;
2. Legislation on Finance and Credit. Banking Activity / Currency Regulation and Currency Control / Currency Accounts

Thesaurus:

1. Finance / Banks and other credit institutions. Credits;
2. Finance / Accounting

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APPROVED by the Board of the Central Bank of the Republic of Uzbekistan Resolution No. 363 dated October 24, 1997

RULES FOR REVALUATION OF CURRENCY ACCOUNT BALANCES IN THE ASSETS AND LIABILITIES OF BANKS OF THE REPUBLIC OF UZBEKISTAN IN THE MULTI-CURRENCY ACCOUNTING SYSTEM

These Rules have lost their legal force based on Resolution No. 15/9 of the Board of the Central Bank of the Republic of Uzbekistan dated July 13, 2019 "On the Revaluation of Currency Account Balances in the Assets and Liabilities of Banks of the Republic of Uzbekistan in the Multi-Currency Accounting System and on Declaring Invalid Amendments Thereto" (Registration No. 535-3, dated August 12, 2018).

These Rules were developed based on the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan," "On Banks and Banking Activity," and "On Accounting," and establish the procedure for revaluation of currency account balances mandatory for banks.

I. MAIN FEATURES OF THE MULTI-CURRENCY ACCOUNTING SYSTEM

1. The current accounting system of banks in the Republic of Uzbekistan is based on a multi-currency system. In the multi-currency accounting system, separate General Ledgers (hereinafter referred to as GL) are maintained for each currency (for example: GL for sums, GL for US dollars, GL for euros, etc.), meaning that as many GLs are opened as there are currencies in the bank's turnover. In each GL, balance sheet accounts are opened in the amount necessary to ensure the full recording of bank operations. In each balance sheet account, auxiliary books (personal accounts) are opened in the necessary amount to organize analytical accounting by customers, types of operations, and other relevant indicators. The bank must ensure that the total final sums in the auxiliary books at the end of each working day match the total final sums of the corresponding balance sheet accounts maintained for each currency.

In the multi-currency accounting system, the accounting for the bank's main assets, authorized capital, income, and expenses is conducted only in the national currency.

2. Operations conducted in one currency are recorded only in the GL of that currency. For example, operations conducted in US dollars are recorded in the GL for US dollars, and operations conducted in sums are recorded in the GL for sums.

3. A currency cross-operation involves two currencies.

a) Operations involving two different currencies are balanced in the GL of each of these currencies through accounting entries related to the relevant accounts of the currency position.

b) Operations conducted in foreign currency and sums are recorded in the GL for foreign currency and the GL for sums.

c) Operations conducted in two different foreign currencies are recorded in the GLs corresponding to these two currencies.

II. REVALUATION

1. For the purpose of determining profits or losses from changes in exchange rates and preparing financial statements, the revaluation of balances of asset and liability accounts recorded in foreign currency is carried out on the last working day of each month. Revaluation may be carried out on any day of the month for the purpose of preparing a consolidated balance sheet report. In such cases, the same revaluation rules apply.

In this case, the balances of the bank's accounts in foreign currencies (assets and liabilities) are revalued based on the Central Bank's exchange rate as of the balance sheet date. (Paragraph 1 in the edition of Resolution No. 26/6 of the Board of the Central Bank of the Republic of Uzbekistan dated July 28, 2018 (Registration No. 535-2, dated September 5, 2018) - National Database of Legislative Acts, September 5, 2018, No. 10/18/535-2/1833)

2. Revaluation is carried out daily in software without accounting entries, solely for the purpose of preparing a consolidated balance sheet report. The difference between the two final sums of revalued assets and liabilities reflects the new balance of the currency position account in the currency ledger.

3. At the end of each month, profits and losses resulting from revaluation are determined for recording in financial statements. The procedure for determining profits and losses resulting from revaluation is as follows:

a) Based on data from the GLs of individual currencies, all balances of assets and liabilities for each currency as of the balance sheet date are aggregated. The difference between the final sums of assets and liabilities must equal the balance of the currency position account in that GL;

b) Assets and liabilities recorded in foreign currency are converted into sums based on the rates specified above;

c) The difference between the two final sums of revalued assets and liabilities reflects the new balance of the currency position account in the currency ledger. This new balance is compared with the corresponding balance of the currency position account in the sum GL. The resulting difference constitutes the profit or loss after revaluation and is reflected in the following accounting entries:

Debit 17101 "Currency Position Accounts"
Credit 45401 "Profit in Foreign Currencies on Spot Transactions"

or

Debit 55302 "Losses in Foreign Currencies on Spot Transactions" Credit 17101 "Currency Position Accounts"

In this case, the currency position account in the sum GL is constantly adjusted until it matches the new balance of the currency position account in the foreign currency GL. Such adjustment reflects the profit or loss obtained from revaluation in the corresponding debit or credit accounting entry.

Profit is obtained after revaluation in the following cases:

• if the new credit balance of the currency position account in the foreign currency GL is greater than the corresponding debit balance of the currency position account in the sum GL;
• if the new debit balance of the currency position account in the foreign currency GL is less than the corresponding credit balance of the currency position account in the sum GL.

Losses are incurred after revaluation in the following cases:

• if the new credit balance of the currency position account in the foreign currency GL is less than the corresponding debit balance of the currency position account in the sum GL;
• if the new debit balance of the currency position account in the foreign currency GL is greater than the corresponding credit balance of the currency position account in the sum GL.

III. ACCOUNTING FOR FIXED ASSETS PURCHASED WITH FOREIGN CURRENCY

Fixed assets purchased with foreign currency are reflected in the balance sheet based on the "Instructions on Accounting for Fixed Assets in Banks of the Republic of Uzbekistan" (Registration No. 1434, dated December 17, 2004).

Intangible assets purchased with foreign currency are reflected in the balance sheet based on the "Instructions on Accounting for Intangible Assets in Banks of the Republic of Uzbekistan" (Registration No. 1199, dated January 14, 2003).

Appendix 1 provides examples of accounting for foreign currency purchase operations and determining profits and losses after currency revaluation.
Appendix 2 provides examples of purchasing fixed assets with foreign currency.

With the publication of these Rules, the "Instructions on the Procedure for Revaluation of Currency Accounts and Items of the Accounting Balance of Banks of the Republic of Uzbekistan in Foreign Currency," Letters of the Central Bank of the Republic of Uzbekistan No. 1318/325 dated December 16, 1992, No. 0913/563 dated May 4, 1993, and No. 1316/1903 dated June 21, 1996, as well as the Demogram of the Central Bank of the Republic of Uzbekistan No. 03/073 dated March 12, 1997, lose their legal force.

Deputy Chairman of the Central Bank M. JUMAGALDIEV

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APPENDIX 1

To the Rules for Revaluation of Currency Account Balances in the Assets and Liabilities of Banks of the Republic of Uzbekistan in the Multi-Currency Accounting System

Examples of Accounting for Foreign Currency Purchase Operations and Determining Profits and Losses After Currency Revaluation

Assume that as of September 14, 20___, the consolidated balance sheet report showed the following balances in accounts:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Funds in Representative Account at the Central Bank	$1,000	8,092,130	8,000,000,000	8,008,092,130
Other Assets			69,000,000,000	69,000,000,000
Total: Assets	-	-	77,000,000,000	77,008,092,130
Customer Funds	$1,000	8,092,130	10,000,000,000	10,008,092,130
Other Liabilities			67,000,000,000	67,000,000,000
Total: Liabilities and Capital	-	-	77,000,000,000	77,008,092,130

1. The Bank Purchased 1,000 US Dollars from a Customer. The Bank's Purchase Rate for 1 US Dollar is 8,071.00 Sums.

Date: September 15, 20___
Revaluation Rate: 8,092.13 sums per 1 US Dollar

Accounting Entries for Reflecting the Purchase of 1,000 US Dollars:

Dollar Ledger	Sum Ledger
Dr 202XX-Customer Account $1,000
Dr 17101-"Currency Position Accounts" 8,071,000
Cr 17101-"Currency Position Accounts" $1,000
Cr 202XX-Customer Account 8,071,000

Consolidated Balance Sheet Report Before Reflecting Profit from Foreign Currency Operation:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Funds in Representative Account at the Central Bank	$1,000	8,092,130	8,000,000,000	8,008,092,130
Currency Position Accounts	(1,000)	(8,092,130)	8,071,000	(21,130)
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	77,008,071,000	77,008,071,000
Customer Funds	-	-	10,008,071,000	10,008,071,000
Other Liabilities	-	-	67,000,000,000	67,000,000,000
Total: Liabilities and Capital	-	-	77,008,071,000	77,008,071,000

The credit balance of account 17101 indicates a profit of 21,130 sums from the foreign currency operation. The accounting entry to reflect the profit is:

Dollar Ledger	Sum Ledger
No Accounting Entry
Cr 17101-"Currency Position Accounts" 21,130
Cr 45401-"Profit in Foreign Currencies on Spot Transactions" 21,130

Consolidated Balance Sheet Report After Reflecting Profit:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Funds in Representative Account at the Central Bank	$1,000	8,092,130	8,000,000,000	8,008,092,130
Currency Position Accounts	(1,000)	(8,092,130)	8,092,130	-
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	77,008,092,130	77,008,092,130
Customer Funds	-	-	10,008,071,000	10,008,071,000
Other Liabilities	-	-	67,000,000,000	67,000,000,000
Net Profit (Loss)	-	-	21,130	21,130
Total: Liabilities and Capital	-	-	77,008,092,130	77,008,092,130

2. No Operation Performed. Revaluation and Preparation of Financial Statements.

Date: September 30, 20___
Revaluation Rate: 8,077.48 sums per 1 US Dollar

Sum Consolidated Balance Sheet Report Before Reflecting Loss from Revaluation of Foreign Currency Account Balances:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,077.48 sums per $1)	Sum Ledger	Total
Funds in Representative Account at the Central Bank	$1,000	8,077,480	8,000,000,000	8,008,077,480
Currency Position Accounts	(1,000)	(8,077,480)	8,092,130	14,650
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	77,008,092,130	77,008,092,130
Customer Funds	-	-	10,008,071,000	10,008,071,000
Other Liabilities	-	-	67,000,000,000	67,000,000,000
Net Profit (Loss)	-	-	21,130	21,130
Total: Liabilities and Capital	-	-	77,008,092,130	77,008,092,130

The debit balance of account 17101 indicates a loss of 14,650 sums from currency revaluation as of the reporting date. The accounting entry to reflect the loss is:

Dollar Ledger	Sum Ledger
No Accounting Entry
Dr 55302-"Losses in Foreign Currencies on Spot Transactions" 14,650
Cr 17101-"Currency Position Accounts" 14,650

Consolidated Balance Sheet Report After Reflecting Loss:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,077.48 sums per $1)	Sum Ledger	Total
Funds in Representative Account at the Central Bank	$1,000	8,077,480	8,000,000,000	8,008,077,480
Currency Position Accounts	(1,000)	(8,077,480)	8,077,480	-
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	77,008,077,480	77,008,077,480
Customer Funds	-	-	10,008,071,000	10,008,071,000
Other Liabilities	-	-	67,000,000,000	67,000,000,000
Net Profit (Loss)	-	-	6,480	6,480
Total: Liabilities and Capital	-	-	77,008,077,480	77,008,077,480

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APPENDIX 2

To the Rules for Revaluation of Currency Account Balances in the Assets and Liabilities of Banks of the Republic of Uzbekistan in the Multi-Currency Accounting System

Example of Purchasing Fixed Assets with Foreign Currency

Assume that as of September 14, 20___, the consolidated balance sheet report showed the following balances in accounts:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Cash in Circulation	-	-	2,000,000,000	2,000,000,000
Funds in Representative Account at the Central Bank	$1,000	8,092,130	3,991,907,870	4,000,000,000
Currency Position Accounts	$(1,000)	(8,092,130)	8,092,130	-
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	75,000,000,000	75,000,000,000
Total Liabilities	-	-	70,000,000,000	70,000,000,000
Issued Authorized Capital - Ordinary	-	-	5,000,000,000	5,000,000,000
Total: Liabilities and Capital	-	-	75,000,000,000	75,000,000,000

1. Funds in the Amount of 1,000 US Dollars Were Transferred for the Purchase of Office Furniture. Payment is Received by the Seller, After Which Furniture is Shipped.

Date: September 15, 20___
Revaluation Rate: 8,092.13 sums per 1 US Dollar

Accounting Entries to Reflect the Operation:

Dollar Ledger Entry	Sum Ledger Entry
Dr 19909 - "Account for Funds Paid for Goods and Materials" $1,000	No Accounting Entry
Cr 10301- "Representative Account at the Central Bank - Nostro" $1,000

Consolidated Balance Sheet Report After Reflecting the Operation:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Cash in Circulation	-	-	2,000,000,000	2,000,000,000
Funds in Representative Account at the Central Bank			3,991,907,870	3,991,907,870
Currency Position Accounts	$(1,000)	(8,092,130)	8,092,130	-
Other Assets	$1,000	8,092,130	69,000,000,000	69,008,092,130
Total: Assets	-	-	75,000,000,000	75,000,000,000
Total Liabilities	-	-	70,000,000,000	70,000,000,000
Issued Authorized Capital - Ordinary	-	-	5,000,000,000	5,000,000,000
Total: Liabilities and Capital	-	-	75,000,000,000	75,000,000,000

2. Furniture Was Delivered to the Bank and Put into Operation.

Date: September 18, 20___
Revaluation Rate: 8,092.13 sums per 1 US Dollar

Accounting Entries to Reflect the Operation:

Dollar Ledger Entry	Sum Ledger Entry
Dr 17101- "Currency Position Accounts" $1,000	Dr 16535 - "Furniture, Equipment, and Fixtures" Account 8,092,130
Cr 19909- "Account for Funds Paid for Goods and Materials" $1,000	Cr 17101-"Currency Position Accounts" 8,092,130

Consolidated Balance Sheet Report After Reflecting the Operation:

Account	Dollar Ledger (US Dollars)	Dollar Ledger (Revaluation Rate: 8,092.13 sums per $1)	Sum Ledger	Total
Cash in Circulation	-	-	2,000,000,000	2,000,000,000
Funds in Representative Account at the Central Bank	-	-	3,991,907,870	3,991,907,870
Currency Position Accounts	-	-	8,092,130	8,092,130
Other Assets	-	-	69,000,000,000	69,000,000,000
Total: Assets	-	-	75,000,000,000	75,000,000,000
Total Liabilities	-	-	70,000,000,000	70,000,000,000
Issued Authorized Capital - Ordinary	-	-	5,000,000,000	5,000,000,000
Total: Liabilities and Capital	-	-	75,000,000,000	75,000,000,000