IFRS and RAS – Features, Commonalities, and Differences of Current Accounting Standards

Publication date/update: March 11, 2025

RAS (Russian Accounting Standards) are national standards for maintaining accounting records in Russia. Originating from the Soviet era, these regulations were initially designed to oversee tax accounting and organizational finances. Accountants adhering to RAS strictly comply with Russian legislative acts, producing documentation tailored for oversight by the Federal Tax Service (FNS).

IFRS (International Financial Reporting Standards) are global standards for financial reporting. Developed to unify financial statements worldwide, they are critical for investors seeking to allocate capital across international projects. Professionals applying IFRS operate with greater flexibility, crafting reports based on economic indicators and their own expertise.

Fundamentally, both IFRS and RAS are accounting frameworks that accountants must consider when preparing financial statements. Since 2018, Russia has introduced FSBU (Federal Accounting Standards) alongside RAS, approved by the Ministry of Finance. This article elaborates on the nuances, commonalities, and distinctions between these two systems.

RAS are grounded in legislative acts and regulatory documents developed by state authorities. They emphasize compliance with tax legislation and other regulatory requirements. Conversely, IFRS constitute a set of international standards established by the International Accounting Standards Board (IASB), prioritizing transparency and comparability of financial information for investors and stakeholders.

A key distinction lies in the format and content of financial statements. RAS mandate the preparation of a balance sheet, income statement, appendices, and notes. IFRS require a broader suite of reports, including:

This provides a more comprehensive view of a company’s financial position.

Another critical difference involves accounting principles. RAS rely on historical cost valuation for assets and liabilities, which may distort a company’s true value. IFRS permit the use of fair value, offering a more accurate reflection of current financial standing.

Under RAS, consolidated reporting is required only for specific entities, such as holding companies and corporate groups. IFRS mandate consolidation for all companies with subsidiaries or affiliated structures, ensuring a precise depiction of a group’s overall financial health.

Divergent accounting principles can significantly impact reported financial outcomes. For instance, RAS’s historical cost approach may undervalue assets and overstate liabilities, affecting profitability metrics. IFRS adoption enables a clearer assessment of a company’s fiscal status and prospects.

Globalization and economic integration amplify the need for comparable and transparent financial reporting. IFRS and RAS represent two distinct systems for preparing financial statements. Below are their principal distinctions:

Enterprises may choose either standard, as Russian law imposes no restrictions.

Despite differences, IFRS and RAS share commonalities:

These similarities promote transparency and comparability, aiding comprehension of both frameworks.

IFRS and RAS diverge in accounting methodologies, each with unique strengths. The choice depends on a company’s objectives, regulatory demands, and investor expectations. Transitioning to IFRS may demand substantial effort but yields precise, transparent reporting for informed decision-making.