Amendments and Additions to the Instruction on Accounting in Microcredit Organizations

22-23 (470-471)-number — 53 — Article 239

CENTRAL BANK OF THE REPUBLIC OF UZBEKISTAN
DECISION OF THE BOARD

239 On Amendments and Additions to the Instruction on Accounting in Microcredit Organizations

Registered by the Ministry of Justice of the Republic of Uzbekistan on June 3, 2011, Registration No. 1728-1

(Becomes effective from June 13, 2011)

In accordance with the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan" (Information Bulletin of the Oliy Majlis of the Republic of Uzbekistan, 1995, No. 12, Article 247), "On Microcredit Organizations" (Collection of Legislation of the Republic of Uzbekistan, 2006, No. 37-38, Article 372), and the Decision of the President of the Republic of Uzbekistan dated November 26, 2010, No. PQ-1438 "On Priority Directions for Further Reforming and Increasing the Stability of the Republic's Financial and Banking System and Achieving High International Rating Indicators" (Collection of Legislation of the Republic of Uzbekistan, 2010, No. 48, Article 442), the Board of the Central Bank of the Republic of Uzbekistan resolves:

1. Amendments and additions to the Annex are made to the Instruction on Accounting in Microcredit Organizations, approved by the Decision of the Board of the Central Bank of the Republic of Uzbekistan dated September 8, 2007, No. 23/1 (Registration No. 1728, October 12, 2007) (Collection of Legislation of the Republic of Uzbekistan, 2007, No. 41-42, Article 426).

2. This decision becomes effective ten days after the day of its state registration by the Ministry of Justice of the Republic of Uzbekistan.

Chairman of the Central Bank F. MULLAJONOV

Tashkent city,
April 30, 2011,
No. 13/2

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ANNEX
TO THE DECISION OF THE BOARD OF THE CENTRAL BANK OF THE REPUBLIC OF UZBEKISTAN DATED APRIL 30, 2011, NO. 13/2

Amendments and Additions Being Made to the Instruction on Accounting in Microcredit Organizations

1. In paragraph 1:
   replace the word "accounting" in the first line with the word "financial"; remove the second line.

2. The second line of paragraph 16 shall be stated as follows:
   "In this case, the cash receipt order (Annex 4) is formalized in one copy and issued to the accounting department for reflecting in accounts and posting to daily documents. The receipt regarding the acceptance of cash is signed by the chief accountant or another authorized person and the cashier, confirmed with the seal of the microcredit organization's cash desk, and returned to the person handing over the funds."

3. In paragraph 19, replace the word "accounts" with the words "secondary balance sheet accounts".

4. Paragraph 20 shall be supplemented with the following line:
   "cash book (Annex 17)".

5. Paragraph 20¹ shall be added with the following content:
   "20¹. General and auxiliary books must be maintained separately for each month according to secondary balance sheet accounts corresponding to the chart of accounts nomenclature.

General and auxiliary books may be maintained using software, except for the cash book. In this case, general and auxiliary books (cash receipt and payment books daily) are copied to paper, posted separately for each month in chronological order, numbered in ascending order, and signed by the head of the microcredit organization and the chief accountant with the number of sheets indicated."

6. In paragraph 21:
   remove the fourth and sixth lines; consider the fifth and seventh lines as the fourth and fifth lines, respectively.

7. In paragraph 22, replace the words "in notebooks" and "to the book" with the words "in books" and "book", respectively.

8. In paragraph 23:
   replace the word "books'" in the first line with the word "book's"; add the following second line:
   "The entries in the cash book are maintained in two copies. The second copy of the cash book pages is tear-off and is considered the cashier's report. Both pages of the cash book are numbered identically. Every day, at the end of the working day, the cashier calculates the summary of operations for the day, calculates the cash balance for the next day, and submits the torn-off second page as the cashier's report to the accounting department along with cash receipt and payment documents, having it signed in the cash book."

9. Remove the words "memorial order" from the third line of paragraph 24.

10. Paragraph 32 shall be stated as follows:
    "32. After the contract for providing microcredit (microleasing, microloan, consumer credit) between the microcredit organization and the client enters into force, a personal account is opened for the client without delay from the next working day. In this case, the microcredit organization opens a separate credit card for each borrower for each microcredit (microleasing, microloan, consumer credit)."

11. Paragraphs 34 and 35 shall be stated as follows:
    "34. When microcredit and microloans are provided to legal entities and individual entrepreneurs by the microcredit organization, and microloans to individuals, a paper credit card is formalized for each borrower for each microcredit and microloan, and accounting of operations performed on microcredits and microloans is maintained therein. Accounting of credit cards and operations performed on microcredits and microloans may be carried out using software.

The credit card must indicate:
the full name of the borrower individual, the name of the borrower legal entity; the personal account number; passport or other identity document details of the borrower individual, details of the certificate of state registration of the borrower legal entity or individual entrepreneur; residence of the borrower individual, location of the borrower legal entity, and their contact details; information on the security of obligations; information on guarantors, including their passport or other identity document details, residence (location), and contact details; purpose of the microcredit or microloan; information on the terms of the microcredit or microloan; information on accrued and paid interest on the microcredit or microloan; information on repayment amounts of the microcredit or microloan;

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information on postponement of payment terms.

35. When performing operations on providing microcredits and microloans, the chief accountant:
    opens a separate personal account for each borrower for each microcredit (microloan) contract; approves the performance of operations on providing microcredits (microloans) and corresponding transfers.

Microcredit (microloan) contracts are stored in the accounting department under the responsibility of the chief accountant."

12. In paragraph 39, replace the words "Credit or loan amount X percent rate X days" with the words "Unpaid balance of the principal amount of the credit or loan X annual interest rate X days".

13. Paragraph 43 shall be supplemented with the following fourth and fifth lines:
    "If transfers to the reserve for covering potential losses by the microcredit organization are less than the established requirements, additional transfers are carried out through account 56802 — "Assessment of Potential Losses on Microloans and Microcredits" at the expense of the microcredit organization during the period in which this situation was identified and reflected in the "Report on Profits and Losses" for the current period.

If reserves formed in excess of established requirements by the microcredit organization are reduced, as well as when claims on assets for which reserves were formed are returned by the borrower, excess reserves are transferred to account 56802 — "Assessment of Potential Losses on Microloans and Microcredits" (if the reserve was created in the reporting year) or account 45921 — "Return of Funds Written Off" (if the reserve was created in a year prior to the reporting year) and reflected in the "Report on Profits and Losses" for the current period."

14. In paragraph 44:
    remove the word "loan" from the third line; add the following fourth and fifth lines:
    "In this case, the future accounting of assets written off from the reserve is maintained in account 95413 — "Written-off Microloans, Microcredits, and Microleases". Assets written off from the reserve and accrued interest on them are maintained off-balance sheet in "Contingencies" accounts for at least three years, and the microcredit organization must take appropriate measures to collect them. The microcredit organization must send a demand letter to the borrower and copies from the relevant "Contingencies" accounts monthly regarding assets written off from the reserve and accrued interest on them.

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This demand letter and copies serve as the basis for applying to the court to collect the debt. If the debt is not covered as a result of the measures taken, the assets written off from the reserve and accrued interest on them are written off by the microcredit organization in the established order."

15. In paragraph 45:
    add the words "or by transferring funds in non-cash form" after the words "in cash" in the first line; replace the word "account" in the second line with the words "or account 10503 — "Deposits Held Pending Collection from Banks"".

16. Paragraph 47 shall be stated as follows:
    "47. The initial recognition of the receivable for assets being provided under microleasing in the microcredit organization is carried out at the start of the validity period of the microleasing contract. In this case, the microcredit organization recognizes this receivable as an asset on its balance sheet equal to the sum of expenses related to purchasing the microleasing object being leased, delivering it to the lessee, and preparing it for use."

17. Remove the words "filling out a memorial order" from the first line of paragraph 48.

18. In paragraph 50, replace the words "microleasing object" with the words "receivable for the asset being provided under microleasing".

19. In paragraph 52, replace the word "calculated" with the words "calculated daily and".

20. In the name of structural unit "3.2" of Section IV, replace the word "microleasing" with the words "leasing (microleasing)".

21. In paragraph 67:
    replace the word "calculated" in the first line with the words "calculated daily and"; state the second line as follows:
    "Debit 54301 — "Interest Expenses on Leasing (Microleasing)"."

22. Paragraph 69 shall be supplemented with the following fourth line:
    "If the transfer of ownership of the microleasing object is not specified in the microleasing contract, depreciation on the microleasing object is calculated for the period equal to the lesser of the validity period of the microleasing contract or the useful life of the asset."

23. Paragraph 75¹ shall be added with the following content:
    "75¹. Leasing accounting at the microcredit organization is carried out in the order established in paragraphs 60 — 75 of this Instruction."

24. The second sentence of paragraph 82 shall be removed.

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25. In paragraph 83, replace the words "after the cashier signs the first copy of the order" with the words "after signing the order".

26. Sub-paragraph "b" of paragraph 84 shall be considered lost in force.

27. In paragraph 86, replace the number "3" in the second line with the number "1".

28. The second sentence of paragraph 88 shall be stated as follows:
    "If they match, they sign the receipt, confirm it with the seal of the microcredit organization's cash desk, and give it to the person handing over the money. The cash receipt order is issued to the accounting department or another responsible employee maintaining the cash receipt book for posting to daily documents at the end of the day."

29. In paragraph 92:
    replace the words "funds" and "in transfer" in the first line with the words "fund" and "upon receipt", respectively; remove the third line; consider the fourth line as the third line.

30. The first line of paragraph 97 shall be stated as follows:
    "Interest on loans and other obligations to be paid is calculated daily and the following accounting entries are made."

31. Paragraph 98:
    add the following first and second lines:
    "In the activities of the microcredit organization, tangible assets used for providing microfinancial services, for lease, or for administrative purposes, as well as those intended for use for more than one year, are considered fixed assets.

Fixed assets include buildings, structures, equipment, computers, furniture, computing technology, transport vehicles, land purchased with usage rights, library funds, objects of signaling and telephony not included in the building value regardless of their cost, and others;" consider the first, second, and third lines as the second, fourth, and fifth lines, respectively.

32. The third line of paragraph 101 shall be supplemented with the words "(when received from founders) or 45994 — "Other Interest-Free Income (when received from others)"".

33. Paragraph 107 shall be considered lost in force.

34. The first line of paragraph 113 shall be supplemented with the words "equal to the difference between the depreciation amount of the relevant asset's restoration value and the depreciation amount of its residual value" after the words "monthly".

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35. In paragraph 120:
    add the following eighth line:
    "In this case, if the amount received from the sale of pledged property exceeds the amount of the microcredit organization's claims, the difference is returned to the pledgor;" consider the eighth, ninth, and tenth lines as the ninth, tenth, and eleventh lines, respectively.

36. In paragraphs 134, 135, and 137, replace the word "bank" with the words "microcredit organization".

37. Paragraph 141 shall be considered lost in force.

38. In paragraph 147, remove the words "and 19931 — "Postponed Taxes"".

39. Chapter 12¹ shall be added with the following content:

"Chapter 12¹. Accounting of Assets and Liabilities Expressed in Foreign Currency

158¹. The following are considered operations of the microcredit organization in foreign currency:
purchase (sale) of property (fixed assets, intangible assets, installed equipment, commodity-material values) in foreign currency; receipt (provision) of credits (microcredits) and loans (microloans) with amounts specified in foreign currency; acceptance (payment) of liabilities expressed in foreign currency.

158². The value of assets and liabilities expressed in foreign currency is revalued in national currency — sum, according to the Central Bank rate on the date of performing foreign currency operations, for reflection in accounting.

158³. Currency items of the microcredit organization's balance sheet are revalued monthly according to the Central Bank rate on the last day of the reporting month and on the date of performing foreign currency operations.

158⁴. The following currency items of the balance sheet are revalued:
currency funds in cash, deposit and loan accounts in banks, including letters of credit; currency money documents; short-term and long-term investments expressed in foreign currency; receivables and payables, credits (microcredits), and loans (microloans) expressed in foreign currency.

158⁵. The following are not revalued:

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property purchased with foreign currency (fixed assets, intangible assets, installed equipment, capital investments, commodity-material values); the amount of authorized capital and the ratios of founders (participants) shares.

158⁶. Exchange rate differences arising from the revaluation of assets and liabilities in foreign currency are carried over to financial results by the microcredit organization using the direct write-off method or the accrual method.

The methods used to carry over these exchange rate differences to financial results must be reflected in the microcredit organization's accounting policy.

158⁷. When the direct write-off method is used, exchange rate differences arising from revaluation are carried over to financial results upon their occurrence (revaluation). Profits arising from exchange rate differences are carried over to account 45401 — "Profit from Changes in Foreign Exchange Rates" and losses to account 55301 — "Losses from Changes in Foreign Exchange Rates".

158⁸. When the accrual method is used, exchange rate differences are carried over to financial results in the following order:
for receivables and payables in foreign currency, upon their payment (write-off); in other cases, upon the performance of economic operations with the relevant currency items of the balance sheet.

158⁹. Positive differences arising from revaluation using the accrual method are accumulated in account 22816 — "Postponed Income from Changes in Foreign Exchange Rates" and subsequently carried over to account 45401 — "Profit from Changes in Foreign Exchange Rates". Negative differences arising from revaluation are accumulated in account 19927 — "Postponed Expenses from Changes in Foreign Exchange Rates" and subsequently carried over to account 55301 — "Losses from Changes in Foreign Exchange Rates".

158¹⁰. When a microcredit organization switches from the accrual method to the direct write-off method, the revaluation of currency items of the balance sheet is carried over to financial results proportionally each month until the end of the calendar year in which the change is accepted."

40. Paragraph 164 shall be stated as follows:
    "164. Charitable contributions and grants provided to the microcredit organization are considered as sources of financing activities and are accounted for in the following order:
    a) when the microcredit organization receives charitable contributions, the following accounting entry is made:
    Debit 10101 — "Cash Funds" or 10503 — "Deposits Held Pending Collection from Banks";

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Credit 45994 — "Other Interest-Free Income"; b) grants provided to the microcredit organization are initially recognized as liabilities, and the following accounting entry is made:
Debit 10503 — "Deposits Held Pending Collection from Banks"; Credit 22814 — "Grant Funds"; c) when conditions related to grants are fulfilled (utilization of grants) by the microcredit organization, the following accounting entry is made:
Debit 22814 — "Grant Funds";
Credit 45917 — "Income from Grant Funds"; d) when grants are received in the form of non-monetary assets, such as fixed assets, the following accounting entry is made according to the assessed value of the assets:
Debit 165 — "Relevant Account of Fixed Assets"; Credit 22814 — "Grant Funds" (if conditions related to the grant exist) or Credit 45917 — "Income from Grant Funds" (if no conditions related to the grant exist).

Depreciation entries for fixed assets received as grants are carried out similarly to other fixed assets of the microcredit organization, and the grant amount in account 22814 — "Grant Funds" is transferred to account 45917 — "Income from Grant Funds" for the depreciation amount calculated for the reporting period; e) upon the end of the reporting year, utilized grants are transferred from the profit (loss) account to the "Utilized Grant Funds" account in capital through the following accounting entry:
Debit 31206 — "Net Profit (Asset-Liability)";
Credit 31701 — "Utilized Grant Funds".

41. In paragraph 166, replace the words "ten-day" with the words "at most one-month".

42. The second sentence of the first line of paragraph 167 shall be removed.

43. Paragraph 169 shall be considered lost in force.

44. Paragraph 171 shall be supplemented with the following second line:
    "Microcredit organizations must store information about operations performed with clients, correspondence with clients, client identification data, and materials related to adequate client verification for at least five years after the termination of practical business relations with clients."

45. In paragraph 172, replace the words "every day" and "that day" with the words "every month" and "that month", respectively.

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46. In the first line of paragraph 173, replace the word "in the warehouse" with the words "in the cash desk, in the warehouse".

47. In paragraph 174, replace the word "in the warehouse" with the words "in the cash desk or in the warehouse".

48. Annexes 3, 4, 7, 11, 13, and 14 shall be stated in the edition corresponding to Annexes 1 — 6 of these amendments and additions.

49. The "Note" column in Annex 5 shall be removed.

50. In Annex 6, replace the words "period" and "From Credit of Accounts to Debit of Accounts" with the words "month" and "From Debit of Accounts to Credit of Accounts", respectively.

51. In the "Expense" section of Annex 17:
    remove the line "Microleasing"; replace the words "Total Cash Expense (A)" with the words "Total Cash Expense (B)".

52. In Annex 20:
    add the following second line to paragraph 1:
    "In this case, accounts for legal entities and individual entrepreneurs in the microcredit organization, as well as accounts for the internal activities of the microcredit organization, are opened with a unique number issued in the National Information Base of Bank Depositors according to their bank accounts, and accounts for individuals are opened with a unique arbitrarily formed number in the format '99XXXXXX' for each individual;" replace the words "of the bank", "in the bank branch", and "of banks" in paragraph 2 with the words "of the microcredit organization", "in the microcredit organization", and "microcredit organizations", respectively.

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