Financial statements
How to read Russian accounting standards and IFRS reports, where to find them, and which numbers deserve trust.
12 articles
Earnings manipulation: where aggressive accounting ends and fraud beginsEarnings manipulation almost never looks like a lie in a specific figure: it looks like a series of formally permissible choices, made one after another and always in the same direction.5 min
Non-GAAP: who chooses the adjustments and how to reconcile them with the financial statementsAdjusted (non-GAAP) measures are figures that do not exist in accounting standards: a company takes a line item from its audited financial statements and adds to it, or subtracts from it, whatever it considers untypical of its ordinary business.5 min
Allowance for doubtful debts: an expense with no cash going outAn allowance for doubtful debts reduces the carrying amount of accounts receivable by the portion the company no longer expects to collect.6 min
FIFO: the costing method that changes profit, not what sits in the warehouseFIFO (from "first in, first out") is the assumption that whatever arrived in the warehouse first is the first to go into cost of sales.5 min
Interest capitalisation: into the debt principal or into the cost of an assetInterest capitalisation means giving up a cash payment in favour of a larger base.5 min
Earnings Quality: How Much Cash Is Behind the ProfitEarnings quality is the share of reported profit that is backed by cash actually received.6 min
Notes to the Financial Statements: Where the Most Interesting Part LiesThe most interesting part of a set of accounts lies not in the primary statements but in the notes: the statements show the result, while the notes show the rules by which it was obtained and the obligations that have not yet reached that result.5 min
The balance sheet: what a company owns and whom it owesThe balance sheet answers the question of where a company's money came from and what it had turned into as of a specific date.5 min
Where to find a Russian company's financial statementsA Russian issuer's financial statements sit in several places at once, and they are not interchangeable: the investor section of the company's website gives the primary source with its appendices and breakdowns; the corporate information disclosure centre holds the legally required publication with a fixed date; the state5 min
The Cash Flow Statement: Why It Is More Honest Than ProfitProfit is a judgement, cash is a fact.6 min
How to read the income statementTop to bottom, from revenue to net profit. What each line means and where one-off items usually hide.
RAS and IFRS: what the difference is and which to readThe difference between RAS and IFRS lies not in accuracy but in the intended reader and in the entity being accounted for.5 min