Accounting In Russia.

INTRODUCTION

Accounting in Russia has always developed under the influence of Western

ideas, which did not prevent it from keeping its originality. The distinctive

nature of the Russian accounting system is primarily due to the

predominantly slate-owned character of the national economy. Even in the

period of the nascent market economy (beginning with the reforms of

Alexander [I in until the Revolution or 1917, axld in the post-

communist period starting from i1)1) I) the state sector was always dominant, overwhelming the private sector. Throughout the entire Russian history, accounting was ba.scd on virtually the same principles.

The first principle is that of the supremacy of the state property: the stale is an owner of all or nearly all the property in the country. This principle dictates the need for a single body establishing the rules of keeping accounting records and the 0rgani7alion of accounting, This principle emerged in the households of ruling princes at the dawn of the Russian state in 862, along with the spread oT the Varangian accounting methods.

The second principle is that of financial liability. Accounting is personal in nature and is primarily focused, rather than on property items, on persons enjoying the rights of administration of such items, who arc under the obligation to compensate the owner, i.e.. normally, the state, for any shortfall of .such items. This principle originated in monastic households

under the influence of By/.anlinc accounting concepts. The personal liability for the integrity of properly of others (whether governmental, public, or private) constituted the basis of the accounting system, turning the controlling function of the accounting System into the dominant One. Later, the Tartar-Mongol yoke consolidated this principle through the introduc¬tion ofa special kind of tax, the poll tax. which was subsequently replaced by taxation based on the number of ploughs, with simultaneous introduc¬tion of the frank pledye principle, i.e.. the principle of collective respon¬sibility ofa community for all the debts of its members.

The third principle is that of the task-work* or fixed task: each laborer is to be given a fixed task, specifically, how much work, of what particular nature, and in what timeframe he or she in required to perform. This principle, combined with the dominance of slate financing as a basis for investments in the economy, led Loa requirement lokeep record of the imp! em en I ati on of the task (budget), bringing closer the financial and in-office accounting: very common forms of accounting were the accounting for budget appropriations, earmarked funds, implementation of plans, funding, elc.

The fourth principle is ihat of collation: all the mutual settlements bciween parties for commercial transactions need to be reconciled. This principle creates a requirement for the mi nor-like reflection of debtors' and creditors1 transactions, contradicts the prudence principle, and makes accruals impossible in Russian accounting.

The fifth principle is ill ill of the supremacy of administrative law relations. According lo this principle, obligations to the superior is always more important than obligations to any third parties. This principle gives rise to the Russian concept of accounting as a predominantly state duty, rather than an essential management tooL

The sixth principle is that of cost-based pricing: the value of assets is determined by their acquisition (manufacturing) cost, Its consistent appli¬cation led to the establishment of a cumbersome system of accounting for production costs based on the full calculation of costs, endless cost reports, while also causing lots of difficulties in the development of the economy, as, in order to raise the income, producers were invariably pressed to build up their costs, which led to sub-optimal use of material, labor, and financial resources.

The sevenLh principle is that of the priority of form over substance, or cull of ceremony: the external appearance of documents, their interrelations, the procedure, ami the sequence of completing them represent an integral element of accounting; the order is more important than the essence, to appear is more important than lo be. This principle is still exerting

considerable negative influence on accounting today and is one of the primary reasons for the differences hetueen I he Russian accounting require¬ments and the international standards. It makes all accounting methods meaningless, substituting them with mere documentation. This approach has its practical expression in the fact that the accounting function refuses to recognize any facts that are not communicated lo the accounting office in documents.

ACCOUNTING IN THE RUSSIAN STATE BEFORE THE REFORMS OF PETER THE GREAT (862-1700)

All the principles mentioned above formed themselves in the era before Peter the Great. Documents of the time have preserved evidence about accounting and bookkeeping in the state sector, monasteries, the construc¬tion sector, and in industry.

Accounting in the slate sector was based on inventory sheets. At the beginning of each financial year, on September I, lax registers were compiled under the supervision of experienced clerks. Each administrative department was in charge of collecting taxes and maintained a tax register relating to the province of the state that was assigned to the particular department for coverage of its expenses. All the records in lax registers and books of receipts and expenses were kept by towns comprising pails or the province that ihe particular department was in charge of. At the beginning of each year, last years' arrears were reported with respect to each town with the indication of the types of arrears. The current entries were made against primary documents, with the accounting records for each town being maintained by types of income, which included 127 categories.

Surviving documents of the Manorial Department show that recording expense transactions already required primary documents (extracts or lists) or an order from the superior official, with each primary document being required to carry a resolution from the clerk who was in charge of the particular case, including the amount to be disbursed written in words.

Accounting records were kept in a number of ledgers, with each entry containing the following data elements: (i) date (month, number, sometimes year). (ii) text (name of the supplier or the counterparty, number and quality of the articles received,

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