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Finance minister: Azerbaijan intends to accelerate IFRS mass implementation process

Business Materials 25 February 2011 16:07 (UTC +04:00)

Azerbaijan, Baku, Feb. 25 / Trend N. Ismayilova /

The reforms, carried out in Azerbaijan in 2005-2008, allowed to prepare national accounting standards, as well as the necessary legal base for this in accordance with international standards, Finance Minister Samir Sharif said during a conference on reforms in the national accounting system.

"Today a new issue of international standards of 2010 is being translated into Azerbaijani. There is a special council. The additions are taken into account and included in our national standards," he said.

Introducing the international accounting standards is one of the requirements of Azerbaijan's integration into the global community. We must speak with the international community in the single language of accounting," the minister said.

The banking system is working closely with international financial institutions. Therefore, the transition to International Financial Reporting Standards (IFRS) was fastest. One of the listing requirements on the Baku Stock Exchange is the transition to IFRS.

"But the implementation of international standards was not easy, so there was a need to accelerate this process," the minister said.

In this regard, commercial and noncommercial entities must provide financial statements on new standards to the Finance Ministry on the basis of certain standards at the second phase.

So, roughly 87 of 115 public interest entities passed to these standards. Roughly 1,816 of 5,547 public agencies report on the new standards. The process is under implementation in 4,500 budget organizations and 1717 municipalities. "Roughly 595 of 2,679 registered non-governmental organizations operate today. We also get reports from them," the minister said.

The special software, available on the official website of the Ministry, was prepared to automate the process. Any commercial organization may use the software in its operations. Sharifov said that the ministry provides them with technical assistance.

"Several problems with introducing national standards; lack of experts having necessary knowledge in this area have been revealed today. It negatively affects the implementation of international standards," the minister said.

At present, there is the third phase of implementing national accounting standards, which was implemented during 2009-2010. Special training sessions and courses were conducted in this area.

"We worked closely with the Education Ministry within these activities. This cooperation gave positive results. Now the lessons in our institutions are conducted in accordance with the new standards. The new textbooks have been already prepared," the minister said.

Sharifov said that the accounting center is under establishment under the Finance Ministry within the training center. It plans to introduce a certification system.

One of the tasks for the future is to improve the regulatory base established in this area, automating the process of making reports and creating a unified database for these reports, as well as strengthening the staff training. "We are working closely with the World Bank in this area", Sharifov said.

Education Minister Misir Mardanov said during the conference that the Education Ministry is ready to fulfill most work to train the staff. It will play an important role in the development of this sphere.

The total project cost is $24 million. The loan agreement for the project was signed in September 2008. It will not be implemented until late December 2012.

Funders for the project include the WB ($11 million), the Japanese government ($3 million), the Swiss State Secretariat for Economic Affairs ($2 million), and the Azerbaijani government ($8 million).

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