Regulation on Requirements for the Chart of Accounts in Commercial Banks and Other Financial and Credit Organizations of the Kyrgyz Republic

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Date of creation: 2024-03-14

Ministry of Justice of the KR No. 4-08 dated 25.01.2008

Approved

by the resolution of the Board of the National Bank of the Kyrgyz Republic

dated December 20, 2007 No. 54/9

REGULATION

on requirements for the Chart of Accounts in commercial banks and other financial-credit organizations of the Kyrgyz Republic

(In the edition of the resolutions of the Board of the National Bank of the KR dated August 17, 2012 No. 34/5, November 16, 2012 No. 43/1, June 15, 2017 No. 2017-P-12/25-12, March 23, 2022 No. 2022-P-12/17-4, December 14, 2022 No. 2022-P-12/78-9, January 17, 2024 No. 2024-P-12/1-3)

Chapter 1 General Provisions

1.1. This Regulation establishes the requirements for the formation of the Chart of Accounts (hereinafter - Chart of Accounts) in commercial banks and other financial-credit organizations (hereinafter - banks) in accordance with the laws of the Kyrgyz Republic "On Banks and Banking Activity" and "On Accounting".

(In the edition of the resolution of the Board of the National Bank of the KR dated January 17, 2024 No. 2024-P-12/1-3)

1.2. The Chart of Accounts represents a structured, economically justified list of accounts, within the framework of which each account has a name and a numeric symbol, is included in a class and group according to a certain classification criterion.

1.3. The Chart of Accounts is developed by banks in accordance with International Financial Reporting Standards (hereinafter IFRS) and is approved in the order established in the bank, taking into account the requirements of this Regulation and other normative legal acts of the National Bank of the Kyrgyz Republic (hereinafter - National Bank).

(In the edition of the resolutions of the Board of the National Bank of the KR dated August 17, 2012 No. 34/5, June 15, 2017 No. 2017-P-12/25-12)

1.4. Accounting according to the Chart of Accounts must ensure the formation of financial, regulatory, and macroeconomic statistical reporting by sectors of the economy (financial, government administration bodies, non-financial (legal entities), population (individuals, non-profit organizations), and non-residents).

Chapter 2 General Requirements for the Chart of Accounts

2.1. Requirements for the Chart of Accounts apply to banks operating on the territory of the Kyrgyz Republic.

(In the edition of the resolution of the Board of the National Bank of the KR dated November 16, 2012 No. 43/1)

2.2. Banks may use the new edition of the Chart of Accounts in commercial banks and other financial-credit organizations of the Kyrgyz Republic, approved by the resolution of the Board of the National Bank No. 28/3 dated May 30, 2007 (Ministry of Justice of the KR No. 66-07 dated July 10, 2007), as a standard Chart of Accounts.

2.3. The Chart of Accounts must:

• ensure the preparation of main financial reports according to IFRS;
• be flexible, have the ability to expand in the future due to changes in the structure or scope of the bank's activities;
• provide sufficient detail for the construction of main financial and management reports.

2.4. The Chart of Accounts is based on the classification of accounts based on economic content, by the purpose of operations carried out by the bank, and includes accounts subject to registration in accounting.

2.5. The number of accounts is determined by the needs of the bank in preparing financial reporting.

2.6. The number of digits in the account number depends on the bank's needs for analytical accounting, as well as on the software used by the bank. At the same time, the number of digits in the account number of Class 2 "Liabilities" must comply with the requirements of the instruction "On numbering bank settlement accounts" approved by the resolution of the Board of the National Bank for accounts reflecting operations on the implementation of non-cash payments and settlements and accumulation of non-cash funds for further use and servicing of the client.

(In the edition of the resolution of the Board of the National Bank of the KR dated June 15, 2017 No. 2017-P-12/25-12)

2.7. Simultaneously with the Chart of Accounts, its description is approved, indicating the purpose of each account, description of accounted operations, and restrictions.

Chapter 3 Requirements for the Structure of the Chart of Accounts

3.1. The Chart of Accounts must ensure accounting for all operations carried out by the bank and include balance sheet and off-balance sheet accounts.

3.2. The Chart of Accounts must include the following classes and groups of accounts:

Class 1 - Assets, including groups:

• Cash

This group includes accounts for accounting for cash (in national and foreign currency) held in the bank, in transit between branches. Separate auxiliary books must be kept for each currency. For financial reporting purposes, the balance of funds in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Correspondent accounts

This group includes accounts for accounting for funds (in national and foreign currency) held in correspondent accounts of the bank. Separate auxiliary books must be kept for each currency. For financial reporting purposes, the balance of funds in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Precious metals

This group includes accounts for accounting for the bank's funds in the form of precious metals in standard and metered (bank) ingots. Accounts of this group must be reflected at nominal value expressed in units of mass (troy ounces), which must be recalculated into som at the price of the last revaluation according to the bank's accounting policy. Separate auxiliary books must be kept for each precious metal. For financial reporting purposes, the price of the precious metal in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Debt securities measured at amortized cost

This group includes accounts for accounting for debt securities that are classified in the category of securities measured at amortized cost in accordance with IFRS, provided the following conditions are met:

a) the securities are managed based on a business model whose objective is to collect contractual cash flows;

b) the contractual terms of the securities give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Securities may be acquired at a price higher or lower than nominal (at a premium or discount). If a security is acquired at a premium, the paid premium is amortized monthly and is charged to reduce the bank's income. If a security is acquired at a discount, the discount is amortized and is charged to increase the bank's income.

Accounting for securities is carried out in the nominal currency. For financial reporting purposes, the value of securities in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Debt and equity securities measured at fair value through profit or loss

This group includes accounts for accounting for debt and equity securities classified in the category of securities measured at fair value through profit or loss in accordance with IFRS, including securities held for trading.

Securities may be acquired at a price higher or lower than nominal (at a premium or discount). If a security is acquired at a premium, the paid premium is amortized monthly and is charged to reduce the bank's income. If a security is acquired at a discount, the discount is amortized and is charged to increase the bank's income.

Accounting for securities is carried out in the nominal currency. For financial reporting purposes, the value of securities in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Debt and equity securities measured at fair value through other comprehensive income

This group includes accounts for accounting for debt and equity securities that are classified in the category of securities measured at fair value through other comprehensive income in accordance with IFRS, provided the following conditions are met:

a) the securities are managed based on a business model whose objective is achieved both by collecting contractual cash flows and by selling the securities;

b) the contractual terms of the securities give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Securities may be acquired at a price higher or lower than nominal (at a premium or discount). If a security is acquired at a premium, the paid premium is amortized monthly and is charged to reduce the bank's income. If a security is acquired at a discount, the discount is amortized and is charged to increase the bank's income.

Accounting for securities is carried out in the nominal currency. For financial reporting purposes, the value of securities in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Deposits in banks and other financial-credit organizations

This group includes accounts for accounting for deposits in banks and other financial-credit organizations. Accounting for funds in a deposit account is carried out in the nominal currency. For financial reporting purposes, funds in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Loans to banks and other financial-credit organizations

This group includes accounts for accounting for loans provided to bank residents and non-residents, as well as interbank placements, which represent loans or deposits provided or placed in banks - residents and non-residents for a term of up to 30 days. Accounting is carried out in the nominal currency. For financial reporting purposes, interbank loans and placements in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Repurchase agreement operations

This group is used for accounting for securities purchased under a repurchase agreement.

• Loans to customers

This group includes accounts for accounting for loans issued to bank customers. Accounting for loans is carried out in the nominal currency. For financial reporting purposes, loans in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Provisions for potential losses and damages

This group includes accounts for accounting for provisions for potential losses and damages (PPLD) and represents contra-accounts to assets. If PPLD is created in the nominal currency of the loan, then for financial reporting purposes, the amount of PPLD in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Fixed assets and intangible assets

This group includes accounts for accounting for land, premises, furniture, office equipment, computers, software, and other intangible assets, motor vehicles used by the bank in its work, and construction in progress. Accumulated depreciation for each category of fixed assets must be reflected on the contra-accounts of that category of fixed assets.

Accounting for fixed assets acquired in foreign currency is carried out in som at the official exchange rate on the day of acquisition.

• Other bank property

This group includes accounts for accounting for real and personal property that has come into the temporary possession of the bank in satisfaction of debt from the pledgor or as a result of the closure of branches and subsidiary companies of the bank, subject to sale.

• Investments and financial participation

This group includes accounts for accounting for investments and financial participation in subsidiary and associated companies of the bank. Accounting for investments is carried out in the nominal currency. For financial reporting purposes, the value of investments in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Accrued interest receivable

This group includes accounts for accounting for accrued interest receivable on assets that generate income in the form of interest. Accounting for accrued interest receivable is carried out in the nominal currency. For financial reporting purposes, the amount of accrued interest receivable in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Accrued commission income

This group includes accounts for accounting for accrued commission income on various services provided to bank customers. Accounting for accrued commission income is carried out in the nominal currency. For financial reporting purposes, the amount of accrued commission income in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Interest accrued receivable on interbank deposits in banks and other financial-credit organizations

This group includes accounts for accounting for accrued interest on deposits in banks and other financial-credit organizations. Accounting for accrued interest is carried out in the nominal currency. For financial reporting purposes, the amount of accrued interest in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Interest accrued receivable on loans to banks and other financial-credit organizations

This group includes accounts for accounting for accrued interest on loans to banks and other financial-credit organizations. Accounting for accrued interest is carried out in the nominal currency. For financial reporting purposes, the amount of accrued interest in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Interest accrued receivable on loans to customers

This group includes accounts for accounting for accrued interest on loans to customers. Accounting for accrued interest is carried out in the nominal currency. For financial reporting purposes, the amount of accrued interest in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Other assets

This group includes accounts for accounting for prepayments, monetary assets in settlement, foreign currency swap positions, accounts receivable, incomplete spot purchases of foreign/national currency and precious metals, and other assets for which no separate groups are provided. Accounting for other assets is carried out in the nominal currency. For financial reporting purposes, the value of assets in foreign currency accounted for in the accounts of this group must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

Class 2 - Liabilities, including groups:

• Settlement (current) accounts and demand deposits of legal entities and individual entrepreneurs

This group of accounts includes all settlement (current) accounts and demand deposit accounts of legal entities and individual entrepreneurs. Accounting for settlement accounts and demand deposits is carried out in the nominal currency. For financial reporting purposes, amounts in settlement accounts and demand deposits in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Correspondent accounts

This group of accounts includes all correspondent accounts of counterparties in the bank. Accounting for funds in a correspondent account is carried out in the nominal currency. For financial reporting purposes, the amount of funds in a correspondent account in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Deposits of individuals

Demand deposits and term deposits of individuals are accounted for in the accounts of this group. Accounting for deposits of individuals is carried out in the nominal currency. For financial reporting purposes, deposits of individuals in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Term deposits of legal entities and individual entrepreneurs

This group includes accounts for accounting for term deposits of legal entities and individual entrepreneurs. Accounting for funds for term deposits of legal entities and individual entrepreneurs is carried out in the nominal currency. For financial reporting purposes, term deposits of legal entities and individual entrepreneurs in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Loans from banks and other financial-credit organizations

This group includes accounts for accounting for loans and interbank placements obtained by the bank for a term of up to 30 days, excluding loans obtained from the National Bank. Accounting for short-term interbank liabilities is carried out in the nominal currency. For financial reporting purposes, interbank loans in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Deposits of banks and other financial-credit organizations

This group includes accounts for accounting for deposits of banks and other financial-credit organizations. Accounting for deposits of banks and other financial-credit organizations is carried out in the nominal currency. For financial reporting purposes, deposits in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Reverse repurchase agreement operations

This group is used for accounting for liabilities for securities that must be repurchased in accordance with the repurchase agreement.

• Loans obtained from the National Bank

• Accounts and loans of the Cabinet of Ministers of the Kyrgyz Republic and local authorities

This group includes accounts for accounting for budget and off-budget accounts and loans obtained from the Cabinet of Ministers of the Kyrgyz Republic and local authorities. Accounting for accounts and loans of the Cabinet of Ministers of the Kyrgyz Republic and local authorities is carried out in the nominal currency. For financial reporting purposes, amounts in these accounts in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Other liabilities and loans

This group includes accounts for accounting for mortgage loans, bills issued by the bank, bonds issued by the bank, other debt obligations issued by the bank, financial leasing of bank assets, subordinated bonds, funds received in the form of an increase in share capital, and other liabilities obtained by the bank.

• Accrued interest payable

This group includes accounts for accounting for interest accrued by the bank for payment to depositors and creditors. Accounting for accrued interest payable is carried out in the nominal currency. For financial reporting purposes, such liabilities in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

• Accrued commission expenses

• Accrued commission liabilities payable

• Other liabilities

This group includes accounts for accounting for creditor accounts, accrued liabilities, incomplete spot sales of foreign/national currency and precious metals, and other liabilities for which no separate groups are provided. Accounting for other liabilities is carried out in the nominal currency. For financial reporting purposes, such liabilities in foreign currency must be translated into som equivalents at the official exchange rate of the National Bank on the reporting date.

Class 3 - (reserved)

Class 4 - Capital, including groups:

• Share capital accounts

This group includes accounts for accounting for preferred and common shares of the bank, capital paid in excess of nominal value. Capital accounts are accounted for only in the national currency.

• Revaluation accounts

This group includes accounts for accounting for capital reserves, increase in the value of fixed assets upon their revaluation, revaluation of investment securities, changes in exchange rates when translating financial statements of foreign associated and subsidiary companies of the bank. Capital reserve accounts are accounted for only in the national currency.

• Undistributed profit/loss of previous periods

• Profit/loss of the current period

Class 5 - (reserved)

Class 6 - Income, including groups:

• Interest income from debt and equity securities

This group includes accounts for accounting for the bank's interest income from securities. Accounting for interest income is carried out in the national currency.

• Interest income from deposits in banks and other financial-credit organizations

This group includes accounts for accounting for the bank's interest income from deposits in banks and other financial-credit organizations. Interest income is accounted for in the national currency.

• Income from transactions with financial derivatives (balance)

• Unrealized income (loss) from revaluation

• Interest income from repurchase agreement operations

This group is used for accounting for the bank's interest income from securities purchased under a repurchase agreement.

• Interest income from loans

• Commission income

• Income from transactions with precious metals (balance)

This group is used for accounting for the amount of realized and unrealized income/losses of the bank obtained from transactions with gold and precious metals owned by the bank.

• Income from investments and transactions with securities (balance)

This group is used for accounting for income (losses) from securities measured at fair value, net income (losses) from subsidiary companies, net income (losses) from associated companies, and dividends from equity and fund investments.

• Income from foreign currency transactions (balance)

This group is used for accounting for realized and unrealized income/losses of the bank obtained from the sale and conversion of foreign currency.

• Unforeseen income

This group is used for accounting for the amount of the bank's income from operations or events not related to the ordinary activities of the bank.

• Other income

This group is used for accounting for other income for which no separate groups are provided.

Class 7 - Interest Expenses, including groups:

• Interest expenses on deposits

This group includes accounts for accounting for interest expenses on bank customer deposits. Accounting for interest expenses is carried out in the national currency.

• Interest expenses on deposits of banks and other financial-credit organizations

• Interest expenses on interbank placements

• Interest expenses on loans from other financial institutions

• Interest expenses on reverse repurchase agreement operations

This group includes accounts for accounting for the amount of the bank's interest expenses on transactions with securities sold under a repurchase agreement.

• Interest expenses on long-term debt

This group includes accounts for accounting for the amount of the bank's interest expenses on subordinated and other long-term obligations of the bank.

• Expenses on loan discounts

• Other interest expenses

Class 8 - Operating Expenses, including groups:

• Personnel expenses

• Commission expenses

• Amortization charges

• Administrative expenses

This group includes accounts for accounting for expenses for leasing of fixed assets, expenses for maintenance and repair of fixed assets, utility expenses, expenses for current repairs, security and alarm expenses, communication services, travel expenses, representation expenses, insurance expenses, notarial and legal services expenses, computer data processing expenses, audit and consulting services expenses, advertising and marketing expenses, publication and subscription expenses, charity expenses, collection expenses, and other administrative expenses.

• Expenses on loans and classified assets

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