Explanation of Amendments and Additions to the Chart of Accounts for Accounting in Microcredit Organizations

EXPLANATION OF AMENDMENTS AND ADDITIONS TO THE CHART OF ACCOUNTS FOR ACCOUNTING IN MICROCREDIT ORGANIZATIONS

The Central Bank of the Republic of Uzbekistan approved amendments and additions to the "Instructions on Accounting in Microcredit Organizations," which were registered with the Ministry of Justice of the Republic of Uzbekistan on June 3, 2011, under No. 1728-1.

These amendments and additions, in turn, necessitated corresponding amendments and additions to the chart of accounts for accounting in microcredit organizations. This is because any changes made to accounting must be reflected in the corresponding accounts in the chart of accounts.

In this regard, by the Decision of the Board of the Central Bank of the Republic of Uzbekistan dated May 21, 2011, No. 16/5, amendments and additions to the "Chart of Accounts for Accounting in Microcredit Organizations" were approved and registered with the Ministry of Justice of the Republic of Uzbekistan on June 24, 2011, under No. 1639-1.

In accordance with Article 16 of the Law of the Republic of Uzbekistan "On Microcredit Organizations" and Chapter VIII of the "Regulation on the Licensing of Microcredit Organizations" (Registration No. 2093, April 13, 2010), since a microcredit organization has the right to establish branches in the manner established by legislation, new accounts for accounting for settlements between the head office and branches were introduced: "16100-Funds received from the head office and/or branches," "16102-Funds received from the head office and/or branches - Financial Funds," "16104-Funds received from the head office and/or branches - Other Assets," "22200-Funds payable to the head office and/or branches," "22203-Funds payable to the head office and/or branches - Financial Funds," "22205-Funds payable to the head office and/or branches - Other Assets."

In accordance with amendments and additions No. 1728-1, new accounts were introduced for accounting for differences arising from revaluation of assets and liabilities denominated in foreign currency at the Central Bank exchange rate: "19927-Deferred Expenses Resulting from Changes in Foreign Currency Exchange Rates," "22816-Deferred Income Resulting from Changes in Foreign Currency Exchange Rates," "45400-Profit Resulting from Changes in Foreign Currency Exchange Rates," "45401-Profit Resulting from Changes in Foreign Currency Exchange Rates," "55300-Loss Resulting from Changes in Foreign Currency Exchange Rates," "55301-Loss Resulting from Changes in Foreign Currency Exchange Rates."

Taking into account that microcredit organizations pay profit tax as legal entities, and in order to streamline the accounting for tax payments, in accordance with Chapter 19 of the Tax Code of the Republic of Uzbekistan, relevant amendments were made to the names and definitions of the accounts "19931-Deferred Taxes," "22502-Accrued Income (Profit) Taxes," "22504-Accrued Other Taxes," "22508-Deferred Taxes," 56714 Taxes (other than income tax) and licenses, "56900-Assessment of Income Tax," "56902-Assessment of Income Tax."

In accordance with amendments and additions No. 1728-1, and in order to improve the accounting for grant funds received by a microcredit organization, new accounts "22814-Grant Funds" and "45917-Income from Grant Funds" were introduced in these amendments and additions, and accordingly, the names and definitions of accounts "31700-Grant Funds" and "31701-Grant Funds" were provided in a new edition.

A separate new account "29807-Dividends Payable" was introduced into the chart of accounts for the payment of dividends to founders from the profit received from the activities of the microcredit organization.

In accordance with Article 3 of the Law of the Republic of Uzbekistan "On Microcredit Organizations," a microcredit organization is not entitled to directly engage in production, insurance, trade-intermediation, and other activities not provided for in this Law. In this regard, taking into account that microcredit organizations do not engage in commercial operations, the definitions of accounts with codes "55600 and 55602" were removed.

In conclusion, the new accounts introduced by the amendments and additions to the chart of accounts for accounting in microcredit organizations serve as the basis for facilitating the management of activities and increasing their efficiency by accurately assessing the assets and liabilities, income, and expenses of the microcredit organization.

Microcredit organizations, based on these amendments and additions, are required to take appropriate measures for implementation in practice and strictly comply with the requirements of this document.

M. MARPATOV
Deputy Director of the Department of Accounting, Reporting, and State Budget Treasury Execution Central Bank of the Republic of Uzbekistan, Ph.D.