ORDER OF THE MINISTER OF FINANCE OF THE REPUBLIC OF KAZAKHSTAN

of June 21, 2007 No. 218

About approval of the National accounting standard No. 1

For the purpose of implementation of the subitem 4) of Item 5 of article 20 of the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting" I ORDER:

1. Approve the enclosed National accounting standard No. 1.

2. To department of methodology of management of the state assets (Aytzhanova Zh. N.) provide state registration of this order in the Ministry of Justice of the Republic of Kazakhstan and official publication in the procedure established by the legislation.

3. Declare invalid the order of the deputy. The Minister of Finance of the Republic of Kazakhstan of February 20, 2004 No. 84 "About approval of accounting standard No. 23 "Accounting and the reporting of small business entities" (it is registered in the Register of state registration of regulatory legal acts of the Republic of Kazakhstan for No. 2754).

4. This order becomes effective since January 1, 2008.

Approved by the order of the Minister of Finance of the Republic of Kazakhstan of June 21, 2007, No. 218

National accounting standard No. 1

Section 1. General provisions

1. Purpose and scope of application

1. This National accounting standard No. 1 (further - the Standard), is developed according to the Law of the Republic of Kazakhstan "About financial accounting and the financial reporting", for the purpose of the determination of procedure for conducting financial accounting and creation of the financial reporting by small business entities (далеесубъект) determined according to the Law of the Republic of Kazakhstan "About private entrepreneurship", the special tax regimes applying according to the tax legislation of the Republic of Kazakhstan for country or farms, legal entities - producers of agricultural products, and also on the basis of the simplified declaration.

2. Action of this Standard does not extend to the financial organizations and special finance companies created according to the legislation of the Republic of Kazakhstan on securitization which state regulation is performed by National Bank of the Republic of Kazakhstan.

2. The determinations used in this Standard

3. In this standard the following determinations are used:

1) Assets - the resources controlled by the individual entrepreneur or the organization as a result of last events from which receipt of future economic benefits is expected.

2) Depreciable cost - original cost of asset less salvage value.

3) Agricultural products - products collected from biological assets of the subject.

4) Collection of agricultural products - department of products from biological asset or the termination of life activity of biological asset.

5) Agricultural activities - process control of biotransformation of biological assets for the purpose of sale, receipts of agricultural products or production of additional biological assets.

6) the Variation is the specifying this by the customer about scope change of the works performed on the agreement.

7) Interim financial statements is financial reporting which contains complete set of the financial reporting for the intermediate period.

8) The intermediate period is financial accounting period which is shorter than complete financial year.

9) Fair value is the amount on which it is possible to exchange asset or to fulfill the obligation when making transaction between the parties informed, independent from each other.

10) Development is use of results of researches or other knowledge when planning or designing production new or significantly the improved materials, devices, products, processes, systems or services prior to their commercial production or application.

11) Events after date of balance are events which take place during the period between date of balance and approval date of the financial reporting to release. Differentiate two types of such events:

1) the events confirming the conditions existing for date of balance (adjusting events after date of balance);

2) the events testifying to the conditions which arose after date of balance (non-adjusting events after date of balance).

12) Book value is the amount on which the asset is recognized balance after deduction of the amount of all accumulated depreciation of this asset.

13) the Biological asset - animal or plant.

14) the Class of biological assets - consolidation of similar animals or plants.

15) Biotransformation - consists of processes of growth, degeneration, production and reproduction as a result of which in biological asset there are high-quality or quantitative changes.

16) the Principle of materiality - omissions or misstatements of financial statement line items are considered essential if they can influence separately or together economic decisions of the users accepted on the basis of the financial reporting. Materiality depends on the size of object or mistake estimated in specific conditions of the omission or misstatement that is shows border or reference point, and is not the main quality characteristic which information shall have to be useful.

17) the Accrual basis - according to this principle results of transactions and other events are recognized upon their making, but not then when money or their equivalents are received or paid. They are reflected in accounting records and join in the financial reporting in that period which they treat.

18) the Accounting period is the term established by the legislation of the Republic of Kazakhstan:

1) the accounting period for the annual financial reporting is calendar year, since January 1 till December 31;

2) the first accounting year for the newly created subject begins from the moment of its state registration to December 31 of the same year.

19) the Research is the original and planned research undertaken with perspective of receipt of new scientific or technical knowledge and ideas.

20) the Income - increase in economic benefits during the accounting period in the form of inflow or increments of assets or reduction of obligations which lead to the increase in the capital other than the increase connected with fees of persons participating in the capital.

21) Inventories are assets, held for sale in the course of ordinary activities or in the form of raw materials and materials, held for use in production process or in case of provision of services.

22) the Construction agreement - the agreement which is specially providing asset construction or complex of objects which are interconnected or interdependent on their design, technology and functions or on their final appointment or use.

23) the Going concern principle - capability of the subject to function continuously and to conduct transactions in the near future. It is supposed that the subject has neither intention, nor need for liquidation or for essential reducing scales of activities (it is minimum - within twelve months, subsequent to the accounting period). In cases when the subject intends to be liquidated or there is need for liquidation, the financial reporting of the subject is constituted on other basis and the applied basis reveals.

24) Fixed assets are tangible assets which:

1) are kept by the subject for use in production or delivery of goods (services), for leasing to other persons or for the administrative purposes;

2) is supposed to be used during more than one period.

25) Fixed asset depreciation is systematic distribution to expenses of depreciable cost of asset throughout the term of its useful use.

26) the Component of fixed asset are elements of fixed asset objects (component parts, spare parts, designs) which require regular replacement, have different useful life and do not correspond to recognition criteria of fixed assets, are reflected as inventories. At the same time, large spare parts and the reserve equipment are classified as property, plant and equipment if the organization expects to use them within more than one period.

27) the Intangible asset is the identifiable non-cash asset which does not have physical shape, withheld for use in production or delivery of goods or services for the purpose of leasing to other parties or in the administrative purposes.

28) Monetary assets are an available money and assets which are subject to obtaining in the fixed or determined cash amounts.

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