IFRS will create benefits for Turkmen enterprises

December 25, 2017 | 09:42 |3847

Source:

Eziz OVEZOV

President Berdimuhamedov signed the Resolution, according to which from January 1, 2019 all enterprises, institutions and organizations in Turkmenistan (with the exception of credit entities) will be transferred to international financial reporting standards (IFRS) and accounting. The innovation opens a number of advantages for enterprises of both the state and private sectors of the country's economy, as informed by specialists of the Institute for Strategic Planning and Economic Development of Turkmenistan.

Economic integration and investment inflow

The transition to IFRS will help Turkmen enterprises to interact more easily with foreign partners and will attract additional investments. This will be possible due to clear definitions of key financial terms that are common in many international companies and organizations. The toolkit of international financial reporting standards will also allow creating more complete and accurate plans for the implementation of large-scale Turkmen projects, allowing investors to demonstrate all the advantages.

Accurate asset valuation and transition to a market economy

Productive management of financial assets is impossible without their accurate assessment. Due to the standards that give an assessment of fixed assets, tangible and intangible, Turkmen enterprises will be able to more efficiently distribute finance, taking into account real data on their resources, the use of which can lead to profit. Also, a number of new standards will allow for market pricing, when prices for goods and services will be set taking into account their real value.

Compliance with the requirements of time

In a constantly changing and dynamically developing market, it is very difficult to give a real assessment of many economic processes, especially given the increasing impact of globalization. IFRS were created to enable national markets to interact better with each other, and their combined financial statements reflected the real financial situation in the world.

The transition to IFRS is part of the long-term economic strategy of Turkmenistan

For several years Turkmenistan has been systematically working on the transition to international financial reporting standards. To date, 28 national financial reporting standards are based on international ones. How exactly will a full transition to IFRS happen? This question is not yet clear. However, experts expect that the remaining 8 international standards (there are only 36 of them) will be added to existing national standards. Therefore, the forecast is quite justified that the process of full transition will take place in a rather short time, but at the same time Turkmen enterprises will manage to avoid confusion and additional difficulties.