Regulatory Alerts1997-10-24 | 363Added · Updated
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
The Central Bank of Uzbekistan's Rules establish the mandatory procedure for banks to revalue currency account balances in their assets and liabilities at the end of each working day using the Central Bank's exchange rate. The document specifies that revaluation results in profit or loss, which is recorded through specific accounting entries debiting or crediting account 17101 'Currency Position Accounts' and corresponding profit or loss accounts. It also details the accounting treatment for foreign currency transactions and the purchase of fixed assets with foreign currency, including illustrative examples in the appendices.
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:
- Legislation on Finance and Credit. Banking Activity / Banking Activity / Accounting and Reporting in Banks;
- Legislation on Finance and Credit. Banking Activity / Currency Regulation and Currency Control / Currency Accounts
Thesaurus:
- Finance / Banks and other credit institutions. Credits;
- Finance / Accounting
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
- 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.
-
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.
-
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
- 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)
-
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.
-
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
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 |
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 |
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