Approval of the Regulation on Accounting for Precious Metals, Stones, and Coins in Commercial Banks

Resolution of the Board of the Central Bank of the Republic of Uzbekistan, registered on 17.12.2004, registration number 1431

Date of entry into force

27.12.2004

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11.11.2021

27.12.2004

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Lost legal force 11.11.2021

[OKOS:

1.07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.21.00.00 Banking Activity / 07.21.17.00 Accounting and Reporting in Banks;

2.07.00.00.00 Legislation on Finance and Credit. Banking Activity / 07.29.00.00 Accounting. Financial Reporting / 07.29.07.00 Accounting in Specific Industries]

[TSZ:

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

2. Finance / Accounting]

RESOLUTION

OF THE BOARD OF THE CENTRAL BANK OF THE REPUBLIC OF UZBEKISTON

ON THE APPROVAL OF THE REGULATION ON THE PROCEDURE FOR MAINTAINING ACCOUNTING OF PRECIOUS METALS, STONES, AND COINS IN COMMERCIAL BANKS

[Registered by the Ministry of Justice of the Republic of Uzbekistan on December 17, 2004, registration number 1431]

This resolution loses its legal force from November 11, 2021, based on the Resolution of the Board of the Central Bank of the Republic of Uzbekistan No. 17/3 dated July 15, 2021 "On Recognizing Certain Regulatory Legal Acts Adopted by the Central Bank of the Republic of Uzbekistan as Having Lost Their Legal Force" [resolution] (registration number 3317, dated 10.08.2021).

In accordance with the Laws of the Republic of Uzbekistan "On the Central Bank of the Republic of Uzbekistan", "On Banks and Banking Activity", and "On Accounting", the Board of the Central Bank of the Republic of Uzbekistan resolves:

1. Approve the "Regulation on the Procedure for Maintaining Accounting of Precious Metals, Stones, and Coins in Commercial Banks" in accordance with the [appendix].

2. This Regulation enters into force 10 days after the date of its state registration by the Ministry of Justice of the Republic of Uzbekistan.

Chairman of the Central Bank Board F. MULLAJONOV

Tashkent city,

November 27, 2004,

No. 25/5

Approved by the Board of the Central Bank of the Republic of Uzbekistan on November 27, 2004, No. 25/5

REGULATION

ON THE PROCEDURE FOR MAINTAINING ACCOUNTING OF PRECIOUS METALS, STONES, AND COINS IN COMMERCIAL BANKS

I. General Provisions

1. This Regulation is developed in accordance with 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 establishes the procedure for accounting for precious metals, stones, and coins in commercial banks of the Republic of Uzbekistan (hereinafter referred to as "banks") in accordance with International Financial Reporting Standards (hereinafter referred to as "IFRS").

II. Definitions

2. For the purposes of this Regulation, the following concepts are used:

net selling price - the selling price calculated with the deduction of estimated costs necessary to effect the sale;

balance value - the fair value less a provision for possible losses;

FIFO method (first-in, first-out) - an accounting method whereby goods and materials acquired first are sold first, and goods and materials remaining at the end of the subsequent purchase period are accounted for at the cost of the later purchases;

weighted average cost method - the value of each item is determined based on the weighted average cost of identical items purchased during the period. The weighted average cost may be calculated periodically or upon each additional delivery, depending on the bank's operational activities.

III. Recognition and Measurement

1§. Recognition

3. Banks shall initially recognize precious metals, stones, and coins at their fair value. Fair value includes acquisition costs and other costs incurred in bringing the precious metals, stones, and coins to their present location and condition.

4. Acquisition costs consist of the purchase price, customs duties, taxes, and fees (except those subsequently refunded to the bank), transportation costs, loading costs, and other costs directly related to the purchase of precious metals, stones, and coins. When determining the acquisition costs of precious metals, stones, and coins, trade and other discounts, as well as other similar items, are deducted.

5. Banks shall include in the value of precious metals, stones, and coins only the actual amounts spent on costs related to the purchase, and on bringing the precious metals, stones, and coins to their present location and condition.

6. Examples of costs that are not included in the value of precious metals, stones, and coins, but are recognized as expenses of the period in which they were incurred, include:

a) storage costs for precious metals, stones, and coins;

b) administrative overhead costs not related to bringing precious metals, stones, and coins to their present location and condition;

c) security costs;

d) selling costs for precious metals, stones, and coins.

7. A bank may acquire precious metals, stones, and coins with deferred payment terms. If such a contract contains a financing element, for example, if there is a difference between the purchase price under normal credit terms and the amount paid, the bank recognizes the difference as interest expense over the financing period of the purchase.

8. The value of precious metals, stones, and coins obtained as a result of the transfer of pledged property to the bank's disposal or through the partial or full repayment of a loan shall be equal to the lower of the following values:

a) the balance value of the loan or a portion of the the loan, less a provision for possible losses; or

b) the net selling price of the precious metals, stones, and coins on the date of their receipt by the bank in the event of full or partial repayment of the loan.

2§. Determination of Value

9. The value of individual precious metals, stones, and coins that do not have the same value is usually determined by their specific identification. In this case, specific costs for valuing individual precious metals or individual stones or coins arise for the determination of the value of each individual unit of precious metals, stones, or coins. These valuation costs increase the value of the precious metals or each stone or coin.

10. If all units of precious metals, stones, or coins have the same value, specific identification is not required. In such cases, the value is determined using the FIFO (first-in, first-out) method or the weighted average cost formula.

11. A bank has the right to voluntarily choose the accounting method for precious metals, stones, or coins as FIFO or weighted average cost. Banks must consistently apply exactly one valuation formula to all inventories of precious metals, stones, or coins.

12. The FIFO method expresses that the precious metals, stones, and coins acquired first are sold first, and as a result, the precious metals, stones, and coins remaining in inventory at the end of the period are accounted for at the price of the last purchases ([Appendix 1] and [Appendix 2]).

13. According to the weighted average cost formula, the value of each precious metal, stone, and coin is determined based on the value of identical precious metals, stones, and coins at the beginning of the period and the weighted average cost of identical precious metals, stones, and coins purchased during the period. The average value may be calculated periodically or upon the arrival of each additional batch of precious metals, stones, and coins, depending on the bank's situation.

3§. Net Selling Price

14. Precious metals, stones, and coins are valued at the lower of their balance value and net selling price.

15. The fair value of precious metals, stones, and coins may not be recoverable if they are damaged or if their selling prices have fallen. Banks determine the amount of such losses by assessing the net selling price of precious metals, stones, and coins.

16. The net selling price of precious metals, stones, and coins is based on the most reliable facts confirming the amounts of the estimated sums existing at the time of such assessments and the sums of precious metals, stones, and coins expected to be sold. These assessments directly take into account price changes resulting from events occurring after the reporting date, to the extent that such events confirm the conditions existing at the reporting date.

17. Banks reflect in accounting any loss or write-down to the net selling price of precious metals, stones, or coins in the period in which the loss was incurred or the write-down was carried out. Banks must maintain off-system accounting for write-downs to the net selling price of each precious metal, stone, or coin. When off-system accounting is maintained, write-downs to the net selling price are reflected for each precious metal, stone, or coin. In individual cases, if the precious metals, stones, or coins being accounted for are identical in weight or other similar characteristics, their accounting may be maintained by grouping them into separate cards based on these characteristics.

18. Banks reflect write-downs to the net selling price of precious metals, stones, and coins as follows:

Dr 56810 - Assessment of possible losses on precious metals, stones, and XX intended for trade;

Cr 10999 - Provision for possible losses from the sale of precious metals, stones, and XX (contra-asset)

19. In each subsequent period, a new assessment of the net selling price is carried out, and additional write-downs are reflected if necessary.

4 §. Derecognition

20. Banks derecognize the balance value of precious metals, stones, or coins upon their sale, write-off, or exit by any other means.

IV. Disclosure of Information

21. The following must be disclosed in the financial report:

a) the accounting policy adopted for valuing precious metals, stones, and coins, including the formula used for determining value;

b) the total balance value of precious metals, stones, and coins;

c) the amount of precious metals, stones, and coins sold, written off, or otherwise disposed of;

d) any write-down amounts included in the bank's profit or loss for the reporting period due to damage, loss, shortage, theft, or loss of condition of precious metals, stones, and coins; and

e) the balance value of precious metals, stones, and coins pledged as collateral for liabilities.

[To the Regulation]

APPENDIX 1

On October 1, 2002, the bank purchased 5 kg of gold at a price of 15,000 sum per gram.

Dr 10901 -	Precious metals		75,000,000
Cr 10301 -	Representative account in the Central Bank - Nostro		75,000,000

On October 9, the bank purchased another 5 kg of gold, but at a price of 15,500 sum per gram.

Dr 10901 -	Precious metals		77,500,000
Cr 10301 -	Representative account in the Central Bank - Nostro		77,500,000

On October 19, the bank purchased the next batch of 4 kg of gold at a price of 14,500 sum per gram.

Dr 10901 -	Precious metals		58,000,000
Cr 10301 -	Representative account in the Central Bank - Nostro		58,000,000

On October 21, the bank sold 4 kg of gold at a price of 16,000 sum per gram. (Write-off is carried out at a price of 15,000 sum per gram).

Dr 10301 -	Representative account in the Central Bank - Nostro		64,000,000
Cr 10901 -	Precious metals		60,000,000
Cr 45213 -	Income from operations of the bank with precious metals, stones, and coins		4,000,000

On October 23, the bank sold another 2 kg of gold at a price of 16,000 sum per gram. (It wrote off 1 kg at a price of 15,000 sum per gram and 1 kg at a price of 15,500 sum per gram).

Dr 10301 -	Representative account in the Central Bank - Nostro		32,000,000
Cr 10901 -	Precious metals		30,500,000
Cr 45213 -	Income from operations of the bank with precious metals, stones, and coins		1,500,000

On October 26, the bank sold another 2 kg of gold at a price of 16,000 sum per gram. (It wrote off at a price of 15,500 sum per gram).

Dr 10301 -	Representative account in the Central Bank - Nostro		32,000,000
Cr 10901 -	Precious metals		31,000,000
Cr 45213 -	Income from operations of the bank with precious metals, stones, and coins		1,000,000

Date	Purchase			Sale				Balance
Price per gram	grams	amount	Price per gram	grams	write-off amount	income	Price per gram	grams	amount
01.10.02	15,000	5,000	75,000,000
09.10.02	15,500	5,000	77,500,000
19.10.02	14,500	4,000	58,000,000
21.10.02				16,000	4,000	60,000,000	4,000,000
23.10.02				16,000	2,000	15,000,000 + 15,500,000	1,500,000
26.10.02				16,000	2,000	31,000,000	1,000,000	15,500	2,000	31,000,000
	14,500	4,000	58,000,000

[To the Regulation]

APPENDIX 2

On February 1, 2002, the bank purchased 3 kg of gold at a price of 15,000 sum per gram. The bank uses the FIFO method for accounting for precious metals, stones, and coins.

Dr 10901 -	Precious metals	45,000,000
Cr 10301 -	Representative account in the Central Bank - Nostro	45,000,000

On February 9, the bank purchased another 5 kg of gold at a price of 15,500 sum per gram.

Dr 10901 -	Precious metals	77,500,000
Cr 10301 -	Representative account in the Central Bank - Nostro	77,500,000

On December 10, 2002, the bank sold 2 kg of gold at a price of 14,500 sum.

Dr 10301 -	Representative account in the Central Bank - Nostro	29,000,000
Dr 55606 -	Losses from commercial operations on precious metals, stones, and coins	1,000,000
Cr 10901 -	Precious metals	30,000,000

On December 31, 2002, the market price of gold amounted to 14,000 sum, and the bank revalued its gold balance.

Dr 56810 -	Assessment of possible losses on precious metals, stones, and coins intended for trade	8,500,000
Cr 10999 -	Provision for possible losses from the sale of precious metals, stones, and coins (contra-asset)	8,500,000

After this, the balances in the bank's balance sheet as of December 31, 2002, constituted the following:

10901 -	Precious metals	92,500,000
10999 -	Provision for possible losses from the sale of precious metals, stones, and coins (contra-asset)	8,500,000

(Collected Acts of Legislative Acts of the Republic of Uzbekistan, 2004, No. 50, Article 506)