LETTER OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN  

of December 3, 2002 No. 24216/769

Present the National Bank of the Republic of Kazakhstan submits you for use in work recommendations about conducting financial accounting in the liquidated banks of the second level of the Republic of Kazakhstan (further - the liquidated bank). These recommendations open procedure for reflection in financial accounting of the transactions made in the liquidated banks according to the current legislation of the Republic of Kazakhstan from the moment of the beginning of liquidating process in bank.

1. Reflection in financial accounting of the account transactions connected with liquidating production (including on ensuring activities of liquidation commission, and also the expenses following from need of ensuring the main functions of the liquidated bank) and performed according to the estimate of liquidating expenses approved in accordance with the established procedure, is performed according to the current legislation about financial accounting, including accounting standards, in the same order, as before liquidation of bank.

2. The depreciation (depreciation) on the fixed assets and intangible assets which are registered or again credited on balance by results of inventory count of assets of the liquidated bank is made in accordance with the established procedure until their disposal from balance (realization or transfer into the ownership of the creditor on account of repayment of accounts payable of the liquidated bank) on monthly basis:

Дт 57815788 Accounts on the expense accounting on assignment of depreciation on fixed assets and intangible assets

Кт 16921699 Accounts on accounting of charged depreciation on fixed assets and intangible assets

Transfer in process of operation of asset of the amount of revaluation on retained income is made also in accordance with the established procedure, at the same time on the amount of cumulative revaluation on fixed assets the following accounting entry is carried out:

Дт 3540 "Reserves of revaluation of fixed assets"

Кт 3599 "Retained net income (uncovered loss)"

At the same time the remained amount of revaluation is transferred to retained income at the time of asset retirement.

3. Charge of remuneration and penalty on receivables on which according to the signed relevant agreements payment of remuneration and charge of penalty is provided is performed according to these agreements and the current legislation, including the regulatory legal act of National Bank of the Republic of Kazakhstan regulating procedure for carrying out classification of assets of bank and contingent obligations and calculation of provisions for them by banks of the second level of the Republic of Kazakhstan. At the same time the following accounting entry is carried out:

on the amount of the added remuneration:

Дт Accounts on accounting of the added remuneration on the corresponding receivables

Кт Accounts on accounting of the income connected with receipt of remuneration on the corresponding receivables

In case of delay of payment on principal debt and remuneration on receivables, and also on the amount of overdue payment, the following accounting entry is performed:

1) on the amount of overdue payment on principal debt:

Дт Accounts on accounting of overdue receivables on principal debt

Кт Accounts on accounting of requirements to debtors

2) on the amount of overdue payment on remuneration:

Дт Accounts on accounting of overdue debt on remunerations

Кт Accounts on accounting of the added remuneration on the corresponding receivables

4. Write-off of the main amount of debt on receivables on off-balance accounting is performed either at the expense of the created provisions or at the expense of the means which are available on accounts No. No. 3510 "The reserve capital of bank", 3580 "Retained net income (uncovered loss) of last years" or 3599 "Retained net income (uncovered loss)". Write-off of the overdue amount of the added remuneration and accrued penalty (penalty, penalty fee) is performed only for the income account, added in the current year, or the means which are available on accounts No. No. 3510 "The reserve capital of bank", 3580 "Retained net income (uncovered loss) of last years" or 3599 "Retained net income (uncovered loss)". At the same time the following accounting entries are carried out:

1) write-off of overdue receivables on principal debt on off-balance accounting is made by the liquidated bank for the 180th day from the date of removal of the amount of principal debt at accounts of overdue assets. In case of write-off of this debt the liquidated bank performs the following accounting entry:

on the amount of overdue receivables on principal debt:

Дт Accounts on accounting of the amounts of special reserves (provisions) on covering of losses

Кт Accounts on accounting of overdue receivables on principal debt

at the same time on this amount:

receipt 7130 "The debts which are written off at a loss";

2) write-off of the overdue amount of the added remuneration and accrued penalty on receivables on off-balance accounting is performed by the following accounting entries:

Дт Income accounts on the added remuneration on the corresponding receivables,

Income accounts on accrued penalty (penalties, penalty fee),

3510 "The reserve capital of bank",

3580 "Retained net income (uncovered loss) of last years",

3599 "Retained net income (uncovered loss)"

Кт Accounts on accounting of the added remuneration on the corresponding receivables,

Accounts on accounting of accrued penalty (penalties, penalty fee)

at the same time on the corresponding amount:

receipt 7130 "The debts which are written off at a loss".

5. Charge of remuneration and penalty on accounts payable stops in case of involuntary liquidation from the date of the introduction in legal force of the judgment about involuntary liquidation of bank, and in case of voluntary - from the date of appointment of liquidation commission of bank.

6. Revaluation of the affined precious metals (further - ADM) is performed before completion of liquidating process according to the procedure, established by accounting standards. At the same time revaluation of precious metal is made based on fixing by the London Association of the market of precious metals (further - fixing of LBMA) and the market rate of US dollar in relation to tenge at the time of this revaluation.

According to accounting standard 9 "Accounting of foreign currency transactions" the market rate of currency exchange is the ratio for recalculation of one currency on another determined proceeding from the demand and supply on certain currency in the active market.

1) In case of change of fixing of LBMA the following accounting entries are carried out:

- in case of increase in fixing:

Дт 1004 "The affined precious metals" (dollar equivalent of this account)

Кт 2872 "Long position of bank on the affined precious metals" (dollar equivalent of this account),

Дт 1874 "Kontrstoimost of the affined precious metals in tenge (long position on the affined precious metals)"

Кт 4704 "The income from revaluation of the affined precious metals" (separate personal account for accounting of unrealized incomes);

- when lowering fixing:

Дт 1873 "Short position of bank on the affined precious metals"

Кт 1004 "The affined precious metals"

Дт 5704 "Expense from revaluation of the affined precious metals" (separate personal account for accounting of unrealized expenses)

Кт 2873 "Kontrstoimost of the affined precious metals in tenge (short position on the affined precious metals)"

2) in case of change of the market rate of US dollar in relation to tenge the following accounting entries are carried out:

- in case of increase in rate:

Дт 1004 "The affined precious metals" (dollar equivalent of this account)

Кт 2872 "Long position of bank on the affined precious metals" (dollar equivalent of this account),

Дт 1874 "Kontrstoimost of the affined precious metals in tenge (long position on the affined precious metals)"

Кт 4703 "The income from revaluation of foreign currency" (separate personal account for accounting of unrealized incomes);

- in case of decline in the rate:

Дт 1873 "Short position of bank on the affined precious metals"

Кт 1004 "The affined precious metals"

Дт 5703 "Expense from revaluation of foreign currency" (separate personal account for accounting of unrealized expenses)

Кт 2873 "Kontrstoimost of the affined precious metals in tenge (short position on the affined precious metals)"

3) at the end of the financial year after carrying out the analysis on realization of ADM on the amount of the unrealized income / expenses on revaluation of these metals the following accounting entries are carried out:

- on income/expenses from fixing change:

Дт 4704 "The income from revaluation of the affined precious metals" (separate personal account for accounting of unrealized incomes)

Кт 5704 "Expense from revaluation of the affined precious metals" (separate personal account for accounting of unrealized expenses)

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