Russian accounting standards and IFRS: the difference and what to read

Most listed companies produce two sets of accounts, and the profit in them differs. That is neither an error nor manipulation — they answer two different questions.

Russian standards answer the tax authority

Russian accounting standards (RAS) are prepared per legal entity and shaped by the regulator's requirements. Subsidiaries are not consolidated into them: a holding company can show a nearly empty RAS report because the entire business lives in its subsidiaries.

IFRS answers the investor

International standards consolidate the whole group and value assets closer to economic reality. Dividend policies, covenants and multiples all rest on IFRS.

When Russian standards still matter

By law dividends are paid out of net profit under RAS — at the level of the legal entity whose shares you hold. A company can report an excellent consolidated IFRS profit and still have no base for a payout at the parent.

What to do in practice

Compute multiples and profitability on IFRS. Check the feasibility of a dividend on the parent's RAS accounts. Both reports live in the statements section.