PROVISION OF CENTRAL BANK OF THE RUSSIAN FEDERATION

of October 5, 2015 No. 496-P

Industry standard of financial accounting of hedging by not credit financial credit institutions

Based on the Federal Law of July 10, 2002 No. 86-FZ "About the Central bank the Russian Federation (Bank of Russia)" (The Russian Federation Code, 2002, No. 28, Art. 2790; 2003, No. 2, Art. 157; No. 52, Art. 5032; 2004, No. 27, Art. 2711; No. 31, Art. 3233; 2005, No. 25, Art. 2426; No. 30, Art. 3101; 2006, No. 19, Art. 2061; No. 25, Art. 2648; 2007, No. 1, Art. 9, Art. 10; No. 10, Art. 1151; No. 18, Art. 2117; 2008, No. 42, Art. 4696, Art. 4699; No. 44, Art. 4982; No. 52, Art. 6229, Art. 6231; 2009, No. 1, Art. 25; No. 29, Art. 3629; No. 48, Art. 5731; 2010, No. 45, Art. 5756; 2011, No. 7, Art. 907; No. 27, Art. 3873; No. 43, Art. 5973; No. 48, Art. 6728; 2012, No. 50, Art. 6954; No. 53, Art. 7591, Art. 7607; 2013, No. 11, Art. 1076; No. 14, Art. 1649; No. 19, Art. 2329; No. 27, Art. 3438, Art. 3476, Art. 3477; No. 30, Art. 4084; No. 49, Art. 6336; No. 51, Art. 6695, Art. 6699; No. 52, Art. 6975; 2014, No. 19, Art. 2311, Art. 2317; No. 27, Art. 3634; No. 30, Art. 4219; No. 40, Art. 5318; No. 45, Art. 6154, No. 52, Art. 7543; 2015, No. 1, Art. 4, Art. 37; No. 27, Art. 3958, Art. 4001; No. 29, the Art. 4348, the Art. 4349, the Art. 4357) and according to the solution of the Board of directors of the Bank of Russia (the minutes of the Board of directors of the Bank of Russia of September 29, 2015 No. 28) the Bank of Russia establishes procedure for financial accounting of hedging for not credit financial credit institutions.

Chapter 1. General provisions

1.1. The hedging financial accounting purpose - to reflect in accounting (financial) records of not credit financial credit institution results of its activities for risk management providing use of financial instruments for management of line items on certain risks which can affect profit or loss (or other comprehensive income if this investment in equity instruments in relation to which not credit financial credit institution decided to represent changes of fair value as a part of other comprehensive income). This approach explains procedure for use of hedging instruments to which hedging accounting is applied to provide understanding of their appointment and influence on accounting (financial) records.

1.2. Financial accounting of hedging is performed if not credit financial credit institution determined the hedging relations between hedging instrument and object of hedging in internal documents. The relations of hedging are determined at the beginning of hedging. Start date of hedging is date of determination of the relations of hedging.

1.3. The hedging instrument can represent:

the derivative financial instrument except for the sold option (except the option sold for the purpose of hedging of the purchased option), No. 39-FZ determined according to the Federal Law of April 22, 1996 "About the security market" (The Russian Federation Code, 1996, No. 17, Art. 1918; 2001, No. 33, Art. 3424; 2002, No. 52, Art. 5141; 2004, No. 27, Art. 2711; No. 31, Art. 3225; 2005, No. 11, Art. 900; No. 25, Art. 2426; 2006, No. 1, Art. 5; No. 2, Art. 172; No. 17, Art. 1780; No. 31, Art. 3437; No. 43, Art. 4412; 2007, No. 1, Art. 45; No. 18, Art. 2117; No. 22, Art. 2563; No. 41, Art. 4845; No. 50, Art. 6247; 2008, No. 52, Art. 6221; 2009, No. 1, Art. 28; No. 18, Art. 2154; No. 23, Art. 2770; No. 29, Art. 3642; No. 48, Art. 5731; No. 52, Art. 6428; 2010, No. 17, Art. 1988; No. 31, Art. 4193; No. 41, Art. 5193; 2011, No. 7, Art. 905; No. 23, Art. 3262; No. 27, Art. 3880; No. 29, Art. 4291; No. 48, Art. 6728; No. 49, Art. 7040; No. 50, Art. 7357; 2012, No. 25, Art. 3269; No. 31, Art. 4334; No. 53, Art. 7607; 2013, No. 26, Art. 3207; No. 30, Art. 4043, Art. 4082, Art. 4084; No. 51, Art. 6699; No. 52, Art. 6985; 2014, No. 30, Art. 4219; 2015, No. 1, Art. 13; No. 14, Art. 2022; No. 27, Art. 4001; No. 29, Art. 4348, Art. 4357);

the purchase and sale agreement of foreign currency, precious metals, securities which is not the derivative financial instrument, providing obligation of one party to transfer foreign currency, precious metals, securities to property to other party not earlier than the third working day after day of the conclusion of the agreement, obligation of other party to accept and pay the specified property;

the agreement which is recognized the derivative financial instrument according to the right of foreign state, regulations of the international treaty or business customs and concerning which the right of foreign state or regulations of the international treaty provide its judicial protection, the option except for sold (except the option sold for the purpose of hedging of the purchased option);

non-productive financial asset or the non-productive financial liability estimated at fair value through profit or loss, except for the financial liability reflected at fair value through profit or loss for which the amount of change of fair value relating to changes in credit risk is considered in other comprehensive income;

the other tools falling under determination of hedging instrument according to the International accounting standard (IFRS) 9 "Financial instruments" in edition of 2014 enacted in the territory of the Russian Federation by the order of the Ministry of Finance of the Russian Federation of June 27, 2016 No. 98n "About introduction of documents of International accounting standards in action in the territory of the Russian Federation and about recognition No. which voided some orders of the Ministry of Finance of the Russian Federation", the registered Ministry of Justice of the Russian Federation on July 15, 2016 42869, with the amendments enacted in the territory of the Russian Federation by the order of the Ministry of Finance of the Russian Federation of July 11, 2016 No. 111n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation" the registered Ministry of Justice of the Russian Federation on August 1, 2016 No. 43044 (further - IFRS (IFRS) 9).

For hedging of currency risk the component of currency risk of non-productive financial asset or the non-productive financial liability can be determined by discretion of not credit financial credit institution as hedging instrument provided that it is not investment in equity instrument for which not credit financial credit institution chose reflection of change of fair value in other comprehensive income. For the purpose of this provision the determinations of financial asset and the financial liability given in the International accounting standard (IAS) 32 "Financial instruments are applied: submission of information", No. 160n enacted in the territory of the Russian Federation by the order of the Ministry of Finance of the Russian Federation of November 25, 2011 "About enforcement of International accounting standards and Explanations of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on December 5, 2011 No. 22501 (The Russian newspaper of December 9, 2011) <1> (further - the order of the Ministry of Finance of the Russian Federation No. 160n).

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<1> With the amendments enacted in the territory of the Russian Federation by orders of the Ministry of Finance of the Russian Federation of July 18, 2012 No. 106n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on August 3, 2012 No. 25095 (The Russian newspaper of August 15, 2012), of October 31, 2012 No. 143n "About enforcement of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on December 12, 2012 No. 26099 (The Russian newspaper of December 21, 2012), of April 2, 2013 No. 36n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on May 27, 2013 No. 28518 (The Russian newspaper of June 5, 2013), of May 7, 2013 No. 50n "About enforcement of the document of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on June 14, 2013 No. 28797 (The Russian newspaper of July 12, 2013), of January 21, 2015 No. 9n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on February 11, 2015 No. 35970 ("The official Internet portal of legal information" (www.pravo.gov.ru), on February 13, 2015).

The choice of hedging instruments is performed by not credit financial credit institution in internal documents.

1.4. The financial instrument determined as hedging instrument according to Item 1.3 of this Chapter is used to accounting of hedging in complete type (without allocation of separate parts) taking into account provisions of this Chapter.

Allocation of separate parts for their use as hedging instrument is allowed only in the cases provided by IFRS (IFRS) 9.

The pro rata share of all hedging instrument can be determined by discretion of not credit financial credit institution as hedging instrument.

The relation of hedging cannot be determined only for part of the period during which the hedging instrument is in circulation.

1.5. Not credit financial credit institution at own discretion can determine any combination as hedging instrument:

derivative financial instruments or their pro rata shares; and

non-productive financial instruments or their pro rata shares.

For the purposes of accounting of hedging as hedging instrument only those financial instruments, their pro rata shares, combination of financial instruments or their pro rata shares which conform to requirements of IFRS (IFRS) 9 can be determined.

1.6. Object of hedging can represent:

reflected in accounts of financial accounting of Chapter A of the Chart of accounts of the financial accounting in not credit financial credit institutions established by the Provision of the Bank of Russia of September 2, 2015 No. 486-P "About the Chart of accounts of financial accounting in not credit financial credit institutions and procedure for its application", the registered Ministry of Justice of the Russian Federation of 07.10.2015 No. 39197 ("the Bulletin of the Bank of Russia" from ________ No. ____) (further - the Chart of accounts of financial accounting in not credit financial credit institutions) (further - balance sheet accounts), asset or liability;

the firm contractual commitment which is not reflected in balance sheet accounts. For the purpose of this provision the firm contractual commitment is understood as the agreement which is binding on exchange of certain quantity of resources at the determined price of certain future date or dates;

the predicted transaction. For the purpose of this provision the predicted transaction is understood as future transaction expected, but not drawn up by the agreement corresponding to criteria of object of hedging according to IFRS (IFRS) 9;

net investment in foreign operation. For the purpose of this provision definition of net investment in the foreign operation given in the International accounting standard (IAS) 21 "Influence of changes of the exchange rates of currencies" enacted in the territory of the Russian Federation by the order of the Ministry of Finance of the Russian Federation No. 160n <1> is applied (further - IFRS (IAS) 21).

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<1> With the amendments enacted in the territory of the Russian Federation by orders of the Ministry of Finance of the Russian Federation of July 18, 2012 No. 106n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on August 3, 2012 No. 25095 (The Russian newspaper of August 15, 2012), of April 2, 2013 No. 36n "About enforcement and cancellation of documents of International accounting standards in the territory of the Russian Federation", the registered Ministry of Justice of the Russian Federation on May 27, 2013 No. 28518 (The Russian newspaper of June 5, 2013).

Object of hedging can be:

separate object;

group of objects;

component of separate object or group of objects.

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