METHODOLOGY OF FORMATION AND USE OF RESERVE FOR LAND RESTORATION ON THE BASIS OF IFRS

Abstract

The article discusses the methodology and methods for assessment, registration and reflection in financial statements in accordance with international financial reporting standards special class of liabilities presented in the provisions, namely reserves of forthcoming costs of rehabilitation of land and implementation of other environmental measures. In accordance with IFRS in respect of such facts of economic activity, as the obligation for the protection of the environment associated with the production activities of the organization must be established an appropriate reserve. The purpose of this reserve is providing users of financial statements of reliable information on the organization’s obligations to the owners of the land at the reporting date, as well as forecasting costs to the organization for the reclamation of lands and reduce the risk of non-payment. They hadn’t counted such an obligation in the form of a provision for reclamation of land leads to a distortion of financial statements.