Accounting

The Accounting Law 2004 stipulates that all significant entities including credit institutions, insurance companies, investment funds and commercial organizations which meet certain criteria will be subject to International Financial Reporting Standards ("IFRS"). Others (except for small private businesses) will have the choice of using either the IFRS or NAS. Small private businesses will also have the right to choose between the NAS or a simplified method of accounting.

All entities registered in Azerbaijan which includes Azerbaijani Legal entities, representative offices and any branches of companies within the territory of Azerbaijan are required to maintain their accounting books and records in local currency, and in accordance with the Azerbaijan accounting legislation ("AAL").

Accounting policies. AAL do not require detailed disclosure of accounting policies used in the preparation of the financial statements or footnote disclosures that provide additional information, analysis and clarification relating to the financial statements.

Property, plant and equipment ("PPE"). Property, plant and equipment is maintained under the historical cost convention (at acquisition price or at the cost of production including transportation and assembly costs) as modified by the revaluation of these assets, if re-valued.

Impairment of assets. AAL does not permit the recording of an allowance against the carrying value of an impaired asset. This includes setting up an allowance for tangible assets as well as inventories, accounts receivable and other assets.

Fore more information please see our "Doing Business in Azerbaijan" publication


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