We would like to draw your attention to the recent clarifications issued by the Central Bank of Russia (hereinafter referred to as the “Central Bank”) regarding the relevant changes in legislation in accordance with the Presidential Decrees.

On 05.03.2022, Presidential Decree No. 95 “On the temporary procedure for meeting obligations to certain foreign creditors” (hereinafter referred to as Decree No. 95) was issued. Decree No. 737 of 15.09.2022 also introduces additional restrictions on payments to foreign residents – in particular, it concerns the implementation of payments to the participant in case of liquidation or reduction of shared capital (entered into force on 15.10.2022).

For which purposes it is compulsory to open a type C special account:

For payments in excess of 10 million rubles (or the equivalent in a foreign currency) per calendar month to “unfriendly” foreign counterparties, as well as to “friendly” foreign creditors, if the rights of claim on obligations passed to them fr om unfriendly foreign creditors after March 1, 2022 (Item 8 of Decree № 95) for:

• total liabilities of the debtor (including loan repayment and interest on it) on loans and borrowings, as well as payment of dividends/distribution of profits of Limited Liability Companies
• loans, borrowings, and financial instruments (including securities) of Joint Stock Companies 
• fulfillment of obligations under concluded agreements which are derivative financial instruments
• purchase of real estate fr om “unfriendly” individuals
• Disbursement of funds by residents due to reduction of shared capital, liquidation or bankruptcy proceedings of resident legal entities (or permission obtained – Decree № 737 of 15.09.2022).

Who, where and in what currency should a type C account be opened:

• A resident sends an application to a credit institution in the name of a foreign creditor for a C-type account, whereby a bank account agreement does not need to be concluded.
  A foreign creditor cannot open a C-type account on its own initiative (Letter of the Bank of Russia No. 019-12-4/2759 dated 06.04.2022).

• The C-type account is kept in rubles, is not opened in a foreign currency and cannot be opened in a foreign credit institution (clauses 3,5 of Decree No. 95).
• A bank account previously opened in the ordinary course of business will not be suitable for use as a C-type account, but depo accounts opened in the name of a foreign creditor before 24.03.2022 can be used.

When is a special account NOT needed?

• C-type accounts are not used if the aggregate amount of all debtor’s liabilities to all foreign creditors mentioned in Clause 1 of Decree No. 95 in a calendar month does not exceed 10 million rubles or its equivalent in foreign currency (at the official exchange rate of the Bank of Russia set as of the first day of the respective calendar month) or there is a permit from the Government Commission.
• If the obligation stipulated by Decree No. 95 is performed to a person who is not “unfriendly” (at the same time meeting the requirements set out in clause 12 of Decree No. 95 that the ultimate beneficiaries are the Russian Federation, its legal entities or individuals, and this information is disclosed to the tax authorities in an appropriate manner)

What is allowed when using a Type C account:

• It is possible to use a C-type account opened to a non-resident upon application of one resident for performance of obligations by other residents to the same non-resident and not to open a new C-type account.
• Transfer of funds to a non-resident to a C-type account opened with a bank different from the bank wh ere the resident is serviced.
• Transfer of rubles from a C-type account opened in favour of a non-resident legal entity of an “unfriendly” state in one credit institution to a C-type account of the same legal entity opened in another credit institution.
• There are no restrictions on residents using several C-type bank accounts for different obligations (contracts, products) in favour of one non-resident or applying one C-type account.

Limitations and specifics of the Type C account:

• Funds in the C-type account opened in the name of a foreign creditor belong to the foreign creditor from the moment the account is credited and until an agreement is concluded with the foreign creditor.
• The bank wh ere the C-type account was opened may not unilaterally close such account due to the absence of the foreign creditor’s application.
• A resident is not entitled to dispose of or request refund from a C-type bank account, except in case the funds were mistakenly credited to a C-type account. 
• Transfer by the client from a C-type bank account to another non-resident bank account (opened both in the Russian Federation and abroad) is currently not possible (without authorisation).

For which purposes money can be written off:

• payment of taxes, duties, fees and other mandatory payments payable to the budget
• transfers for the purchase of federal loan bonds
• transfers to current accounts of non-residents in the currency of the Russian Federation, as stipulated by the permit
• transfers for other transactions provided for by the permit
• payment of commissions to the authorised bank servicing the account.

The new Federal Accounting Standard FSBU 4/2023 “Accounting (Financial) Statements” is mandatory for use starting with the accounting statements for 2025 in all commercial organizations in the real sector.

The standard regulates the composition and content of information, the composition of appendices to the balance sheet and the statement of financial results, the composition of appendices to the balance sheet and the statement on the proper use of funds, the composition of interim financial statements, sample forms of financial statements and the conditions for the reliability of financial statements.

The composition of the annual and interim financial statements in accordance with the cl. 5 and 6 of FSBU 4/2023 of a commercial organization includes a balance sheet, a statement of financial results and appendices thereto. The appendices to the balance sheet and the statement of financial results consist of a statement of changes in equity, a statement of cash flows, and notes to the balance sheet and the statement of financial results.

Balance sheet

An idea of the financial position of an economic entity as of the reporting date is provided by the disclosure in the balance sheet of at least the following indicators: intangible assets; fixed assets; investment property; deferred tax assets; financial investments; inventory; long-term assets for sale; value-added tax on acquired assets; accounts receivable; cash and cash equivalents; equity (for commercial organizations)/targeted financing (for non-profit organizations); borrowed funds; accounts payable; deferred tax liabilities; provisions (cl. 9 of the FSBU 4/2023).

In addition to the indicators given in the cl. 9 of the Standard, other indicators may be disclosed considering materiality (for example, indicators of goodwill; intangible exploration assets; tangible exploration assets; capital investments in intangible asset objects; capital investments in non-current assets; rights to use the assets investment in a lease; underbillings; lease liabilities (cl. 10 of the FSBU 4/2023).

Statement of financial results

The statement of financial results should give an idea of the financial results of the activities of an economic entity for the reporting period. The statement of financial results discloses information about all income and expenses of an economic entity (cl. 25 of the FSBU 4/2023).

One of the main changes in the statement of financial results is the indicator of profit (loss) from discontinued operations (less the related corporate income tax). It is disclosed separately from profit (loss) from continuing operations before taxation.

Cl. 28 of FSBU 4/2023 determines the procedure for offset between indicators of other income and other expenses. An offset between these indicators is made if they are related to one (for example, the result from the disposal of non-current assets, the result from the disposal of a capital investment object) or several similar facts of economic life (in particular, exchange rate differences, the result of revaluation of non-current assets included in the income or expenses of the reporting period, the result of impairment of non-current assets and recovery of impairment included in the expenses or income of the reporting period). An exception is when the separate presentation of such income and expenses can affect the decisions of users of financial statements or such presentation is provided for by other standards.

Clause 29 of FSBU 4/2023 contains a list of income and (or) expenses that, taking into account materiality, are disclosed in the statement of financial results or notes. This list includes indicators of income and (or) expenses for the reporting period related to the impairment of inventories and reversal of impairment, impairment of non-current assets and reversal of impairment, revaluation and disposal of non-current assets, settlement of litigation and write-off of provisions.

According to the cl. 30 of FSBU 4/2023, the notes disclose information on the composition of expenses for ordinary activities recognized in the statement of financial results (taking into account changes in the balances of work in progress and finished goods). The information is presented in the context of the relevant elements.

Statement of changes in equity

The sample report presents the result of changes in equity for the reporting period, and not separately the increase and decrease in capital, as in the form.

All changes are reflected in one table, including information on the impact on each component of equity of adjustments to the reflection of the consequences of changes in accounting policies and the correction of significant errors in accounting.

The accumulated revaluation of non-current assets is allocated as an independent component of capital.

Statement of cash flows

In the sample report, a separate line singles out cash flow receipts from current operations in the form of interest on accounts receivable from customers. Apart from that, the composition of the information in the sample corresponds to the composition of the information in the form of the cash flow statement, approved by the Order of the Ministry of Finance of Russia dated 02.07.2010 No. 66n.

Notes

The notes disclose information that is necessary for users of financial statements to make economic decisions, but is not disclosed in the balance sheet, statement of financial results, statement on the planned use of funds, statement of changes in equity, or statement of cash flows (cl. 40 of the FSBU 4/2023).

Cl. 46 of FSBU 4/2023 specifies the list of information disclosed in the Notes.

We will be happy to answer your questions regarding FSBU 4/2023.

Exclusively for the Russian Business Guide magazine, Daria Pogodina, Managing Director of swilar presented a review article “CHANGES IN 2024: Double Taxation Agreements (DTAs), Transfer Pricing, Offshoring and other news” providing detailed step-by-step analysis of the changes and their consequences.

You can read the article online in Russian or English, or download two-language article in pdf-format by clicking the “Download ru” button below the message.

On 10.07.2023, the Federal Law No. 316-FZ “On Amendments to the Federal Law “On the Legal Status of Foreign Citizens in the Russian Federation” (hereinafter referred to as Federal Law No. 316-FZ), about which we informed earlier, was signed and published.

We remind you that, starting from 01.03.2024, the provision of the specified Federal Law No. 316-FZ comes into force, which changes the wage (remuneration) rate for highly qualified specialists (hereinafter referred to as HQS).

In particular, starting from 01.03.2024, the wages (remuneration) of an HQS must be at least 750 000 RUB per quarter. Previously, the minimum wage (remuneration) for an HQS in general was 167 000 RUB per month.

Taking into account the above, in the first quarter of 2024, the total wages (remuneration) of an HQS must be in conformity with the amount specified in the legislation, that is, at least 750 000 RUB per quarter.

Please note that the above position corresponds to the position of the Directorate of External Labour Migration of the Main Directorate for Migration Issues of the Ministry of Internal Affairs of the Russian Federation stated by the department when contacted in writing.

In case of violation of the established amount of payments, the company shall be deprived of the right to attract foreign citizens to work in the Russian Federation as HQS for two years (subclause 1 of clause 26 and clause 26.1 of the art. 13.2 of the Federal Law No. 115-FZ dated 25.07.2002 “On the Legal Status of Foreign Citizens in the Russian Federation”, hereinafter referred to as Federal Law No. 115-FZ).

We remind you that in accordance with the clause 13 of the article 13.2 of the Federal Law No. 115-FZ, employers and customers of work (services) are obliged to notify the federal executive body in the field of internal affairs or its authorized territorial body for the fulfilment of obligations to pay wages (remuneration) to the HQS on a quarterly basis, no later than the last working day of the month following the reporting quarter.

Failure to notify or violation of the established procedure and (or) form of notification by the employer or customer of work (services) involving highly qualified specialists entails administrative liability established by the part 5 of the article 18.15 of the Code of Administrative Offenses of the Russian Federation, namely:

• imposition of an administrative fine on officials in the amount of 35 000 – 70 000 RUB; for legal entities – from 400 000 to 1 million RUB.

We will be happy to answer your questions!

On 28.11.2023 a so called “Big Tax Law” Federal Law No. 539-FZ of 27.11.2023 was published, which makes revolutionary changes in transfer pricing already fr om 01.01.2024.

We have compiled a detailed overview of the planned changes.

What will be changed:

1. A 15% withholding tax has been introduced on intragroup services provided by foreign related parties;
2. The list of related parties will expand;
3. More transactions will be recognized as controlled;
4. The amount of additional tax charges will increase;
5. Penalties for failure to comply with transfer pricing rules will increase;
6. The list of information submitted in transfer pricing reporting will be expanded;
7. New “safe” intervals for interest rates.

Below we will consider each of these significant changes separately.

    1. Withholding tax on services of foreign related parties

According to the new rules, a withholding tax of 15% will obligatory be withheld from the services of foreign related parties with residence in a country with which the DTT has been suspended.

For transactions with other countries, it is necessary to read the terms of the DTT agreement.

    2. Expansion of the list of related parties

The list of related parties will be added to:

• the related party and its controlled foreign company (CFC)
• CFC’s of the same related parties,  «sister’s» CFC
• foreign structures without the formation of a legal entity registered in an offshore jurisdiction (or if at least one of the participants in such a structure is registered in an offshore jurisdiction)

    3. Expansion of the definition of a controlled transaction

Transactions, one of the parties to which is a person whose place of registration (place of residence, place of tax residence) is a so-called offshore jurisdiction, are considered controlled.

Since the list of offshore jurisdictions was expanded from 01.07.2023, all international transactions with these jurisdictions, even with independent partners, will be considered controlled from 01.01.2024.

Reporting on such transactions must be submitted after exceeding the threshold of 120 million rubles per year.

At the same time, transactions will not be recognized as controlled if the following conditions are met:

• transactions were concluded before March 1, 2022
• the procedure for determining prices and (or) pricing methods (formulas) used in such transactions did not change after March 1, 2022,
• transactions are not recognized as controlled in accordance with transfer pricing legislation as of March 1, 2022.

    4. Possible additional tax charges

When a tax audit is carried out and it is discovered that prices other than market prices have been used for a controlled transaction, the tax base will be adjusted to the median value (and not to the maximum-minimum value of the corridor, as it was previously).

If tax authorities make a transfer pricing adjustment to the tax base in the Russian Federation for foreign trade transactions, these adjustments will be qualified as hidden dividends from sources in the Russian Federation (the so-called “secondary adjustment”), and will be subject to withholding tax at a rate of 15% (in addition to the penalty).

If the taxpayer independently carries out a transfer pricing adjustment before the start of control measures and the corresponding funds are transferred by a foreign partner to an account in a Russian bank, this transfer pricing adjustment would not qualified as hidden dividends.

Thus, the total possible amount of additional tax charges can be up to 35% of the price adjustment amount:

20% additional profit tax + 15% withholding tax

    5. New levels of penalties

For non-payment or incomplete payment of tax as a result of the application of prices that do not correspond to market prices:

• in relation to foreign trade transactions – 100% of the amount of unpaid tax on the profit of the foreign counterparty, equal to the amount of the transfer pricing adjustment (but not less than 500 000 rubles)
• in relation to domestic Russian transactions – 40% of the amount of unpaid tax (but not less than 30 000 rubles)

For failure to submit within the prescribed period or provision of a notification of controlled transactions containing misinformation – 100 000 rubles

For failure to submit documents within the prescribed period – documentation regarding a specific transaction (group of transactions), notification about participation in an international group of companies (for each fact of violation) – 500 000 rubles.

For failure to submit within the prescribed period or provision of documents containing misinformation – country report, global documentation, local documentation, accounting (financial) statements of a member of an international group of companies (for each fact of violation) – 1 000 000 rubles.

    6. More information to submission to tax authority

Expanded information required to be submitted to the Federal Tax Service from 01.01.2024

Notification of controlled transactions

(compulsory annually no later than 20.05.)

· terms of the transaction (details are established only for goods transactions)

· methods and sources of information used in the transfer pricing (previously not required to be disclosed)

· value creation chain for transactions in the field of foreign trade in raw materials (according to the list of the Ministry of Industry and Trade, clauses 5-6 of Article 105.14 of the Tax Code of the Russian Federation) only with related parties.

Documentation on transfer pricing
(upon request of the Federal Tax Service within 30 days)

· information on income and expenses, number of employees, amount of profit (loss), value of fixed assets and intangible assets of a foreign counterparty that is a party to a controlled transaction (including the attachment of relevant supporting documents)

· description of the terms of the transaction

· financial statements of a foreign counterparty.

The refusal of an independent counterparty to provide the requested information must be reported to the Federal Tax Service of Russia.

In transactions with related counterparties, the taxpayer does not have the right to refer to a refusal to disclose information.

Disclosure of information will require the taxpayer to collect a significant amount of additional information, as well as its systematization and storage in the accounting system.

      7. New “safe” interest intervals for loans

From 01.01.2024, the lower lim it of the basic “safe” intervals for loan transactions is reduced:

• for loans in RUB: min – 10% of the key rate of the Central Bank of the Russian Federation (but not less than 2%), max -150% of the key rate of the Central Bank of the Russian Federation;
• for loans in CHF and JPY: min – 1%, max – corresponding rate plus 5%;
• for loans in EUR, CNY, GBP and other currencies: min – 1%, max – corresponding rate plus 7%.

The first reporting period under the amended rules is 2024, notification of controlled transactions must be submitted before 20.05.2025, but an audit of contracts that are subject to changes and possible adjustments to international transactions must be carried out now.

There are many changes in transfer pricing, and the risks of additional charges for transfer pricing are increasing.

High-quality documentation remains a tool for protecting the taxpayer’s position regarding approaches and methods for justifying market prices

We have been working with transfer pricing and preparing documentation for our clients for many years.

We will gladly support you in preparing a reasoned tax position.

In this overview, we would like to draw your attention to some of the issues that foreign-owned companies face in liquidating an LLC (rus. OOO) in Russia in 2023.

What is generally important to keep in mind when deciding on liquidation:

• Liquidation is not a quick process and will take up to 1 year. This term may be extended for 6 months through the court (para 6 of the article 57 of the Federal Law No. 14-FZ dated 08.02.1998 “On Limited Liability Companies”);
• As soon as the decision is made to liquidate the company, the powers of the current CEO will be terminated and the liquidator/liquidation commission will take over the management of the company (a previously acting CEO may also be appointed);
• The company will need to carry out “preparatory work”: by the time of liquidation, it will need to ensure that it has no open tax and supplier/buyer debts;
• It is necessary to plan work with personnel and terminate labor contracts;
• It will be necessary to archive documents: archiving is mandatory for certain types of documents, and the retention period should be 75 years or even more, depending on the type of a document;
• It is necessary to be prepared for a possible tax audit: the depth of the audit, as a rule, may be up to three preceding years.

In addition to the abovementioned general standards, in 2023 the companies with foreign participation from unfriendly countries must consider the following points:

• Restrictions on payments with participants from foreign (unfriendly) states.

Payments in the amount exceeding 10 million Rub. (or equivalent in other currency) per calendar month made by residents to persons from unfriendly states as a result of liquidation of Russian legal entities are subject to a special procedure: in accordance with paras 2-9 of the Presidential Decree No. 95 dated 05.03.2022, they must be made through C-type accounts. More details on C-type accounts can be found here.

Payments may be made without following this procedure on the basis of permissions issued by the Bank of Russia and the Ministry of Finance of Russia (Presidential Decree No. 737 dated 15.10.2022).

• Permission of the Governmental Commission

Based on the official explanations of the Russian Ministry of Finance, liquidation is not directly included in the list of transactions for the purpose of applying Presidential Decree No. 618 dated 08.09.2022 and does not relate to transactions that require permission of the Governmental Commission for Control over Foreign Investment in the Russian Federation (the “Governmental Commission”).

Still most notaries refuse to certify liquidation applications if there is no permission issued by the Governmental Commission, so it is necessary to take this factor into account when planning the process.

Thus, when deciding on liquidation, we recommend to consider the abovementioned peculiarities, carefully weigh the pros and cons, including considering other possible options that may help to simplify this procedure.

On 26 March 2022 the Law No. 67-FZ was adopted, later clarifications of the Ministry of Finance were published – in the Letter No. 03-12-12/1/37761 of 26 April 2022 the Ministry of Finance informed that fr om 1 January 2022 the threshold for recognizing transactions as controlled was raised to 120 million rubles instead of the previous 60 million rubles valid for transactions in 2021. Similar clarifications were also issued later by the Federal Tax Service (No. ШЮ-4-13/6548@ of 27 May 2022).

The Tax Service also previously published a letter (No. ШЮ-4-13/2724@ of 5 March 2022) on the application of discounted prices that could result in transaction losses if certain legal entities are subject to sanctions. Such circumstances should be taken into account by the tax authorities when considering transactions and price levels.

Another novelty is the non-application of the 40% penalty on unpaid tax (at least RUB 30,000) for transactions in 2022-2023, regardless of the date of the contract (Russian Tax Code, Article 129.3). However, transfer documentation defining the price corridor and level must be available. Please note that the cancellation of penalties does not remove the risk of additional tax charges from the tax authorities.

In addition to updating the lim it and removing the penalty mentioned above, a number of other changes have been spelled out in Law 67-FZ of 26.03.2022.

With the new amendments, the so-called “safe margin” for interest rates in intragroup loan agreements will change between 2022 and 2023. If the interest is within this range (not above the maximum and not below the minimum), the company may recognise it as an expense in full for tax purposes. If the interest rate is outside this range, there is a risk of the expense not being recognised.

Based on the example of the euro (Euro short-term rate), the following interest rate ceilings for liabilities denominated in euro will be established as of 1 January 2022 (for USD or any other currency other than RUB, the values will be equivalent, applying the rates corresponding to the currency, such as SOFR for USD, SHIBOR for CNY, SONIA for GPB):

Minimum: STR rate in EUR +0% (previously stated as + 4% in the Tax Code);

Maximum: STR rate in euros +7% (+5% for SARON rates and contracts in Swiss francs, TONAR and Japanese yen).

For ruble-denominated liabilities, a range of 0 to 180% of the Bank of Russia key rate (previously 75 to 125%) has been adopted.

The interest rate ceilings for debt instruments have also been modified: for loans, overdrafts and intercompany receivables denominated in a foreign currency from 1 January 2022 to 31 December 2023, the maximum rate will be that of 01.02.2022 (86.5032 for euro); interest on liabilities during these two years will be determined at the rate on the last day of the reporting period and must not be higher than the rate on 01.02.2022.

Changes are also made to the calculation of the thin capitalisation rule – the value of liabilities (existing before 01.03.2022) in foreign currency for the purposes of controlled debt is determined at the regulatory rate on the last reporting day, and the rate cannot be higher than the rate set by the Central Bank as of 01.01.2022.

We would also like to point out that as a result of the suspension of tax information exchange between Russia and certain countries, Russian tax residents who are members of an international group of companies will have to send a “Country Report” to the tax authorities upon request. It is currently known that the UK (from 17.03.2022), Germany (from 01.04.2022), USA (from 05.04.2022) have temporarily stopped the exchange of tax information with the Russian Federation.

We would like to bring to your attention that the order of the Ministry of Finance dated 30 May 2022 N 86n approved the new standard FAS 14/2022 “INTANGIBLE ASSETS” (registered with the Ministry of Justice of Russia 28 June 2022, no. 69031).

The beginning date of application of the standard is the accounting period of 2024, with early application permitted.

Simultaneously with the adoption of the new standard, RAS 14/2007, “Accounting of intangible assets”, will be discontinued with effect fr om 1 January 2024.

Before adopting the new standard, we recommend the following actions:

• Conduct an inventory of the organisation’s intangible assets (hereinafter, IA) that could be classified as IA in accordance with FAS 14/2022;
• Establish a limit on the value of IA in order to classify acquisition and creation costs as IA, or recognise them as expenses for the period;
• Make changes to the company’s accounting policies;
• Determine the useful life expectancy of IA and the terms of annual useful life assessment for relevance;
• Choose the method of subsequent accounting of IA (after initial recognition), at initial or revalued cost (applicable if there is an active market for IA in accordance with IAS 38);
• Determine the residual value of IA on the company’s balance sheet and the terms of its annual valuation;
• For the method of valuation of IA at revalued cost, determine the frequency of revaluation for each group of IA;
• Reflect changes in the organisation’s balance sheet as at 01.01.2024 using incoming adjustments;
• Disclose information in the notes to the company’s accounting (financial) statements.

What does this mean in practice?

For accounting purposes, intangible assets are to be classified by type (electronic computer programmes (ECPs); databases; inventions; utility models; industrial designs; production secrets (know-how); selection achievements; licences and permits) and group.

The unit of accounting for intangible assets is an inventory item.

An inventory object of intangible assets is a set of rights to it arising in accordance with contracts or other documents confirming the existence of the organisation’s rights to such an asset.

A complex object that includes several protected results of intellectual activity (e.g., a multimedia product, a single technology) may also be recognised as an inventory object of intangible assets.

Under the new standard, an entity has the right to independently set a value lim it on the attribution of an item to either IA or expenditure for the period upon completion of capital expenditures related to the acquisition, creation of the assets (paragrath 7   FAS 14/2022).

The standard introduces the concept of residual value – the amount that an organisation would receive if the item were disposed of. The residual value of an IA is deemed to be zero, except in the following cases:

• a contract requires another party to purchase the intangible asset from the organisation at the end of its useful life;
• there is an active market for the item, from which its residual value can be determined;
• it is highly probable that an active market for the item will exist at the end of its useful life.

(paragraph 36 FAS 14/2022).

Depreciation elements such as the residual value, useful life and depreciation method should be reviewed systematically (at least at the end of each year) for changes and, if necessary, adjusted (paragraph 42 FAS 14/2022).

Transition period

Under paragraphs 52-54 of FAS 14/2022, the effects of a change in accounting policy arising from the adoption of the new standard should be recognised retrospectively – as if the standard had been applied from the start of the acquisition of IA.

However, an organisation has the option not to restate comparative amounts for periods prior to the reporting period, but to reflect the changes in carrying amounts resulting from the adoption of the standard through the organisation’s retained earnings.

Prospective application of the standard, without incoming adjustments at the beginning of the year is only possible for organisations that have the right to apply simplified accounting methods, including simplified (financial) reporting (paragraph 55 of FAS 14/2022).