The specifics of accounting for transactions in a foreign representation of the Russian entity
Importance As international cooperation and ties expand, many Russian entities set up their representative offices abroad so to penetrate the global markets. This process is coupled with some complicated matters concerning accounting in the representative offices abroad. Therefore, it is interesting and relevant to examine such challenging issues of accounting for transactions the overseas representative office makes. Objectives The research investigates complicated matters of accounting in representative offices of the Russian entities that operate outside the Russian Federation, and formulate constructive proposals on accounting in overseas representative offices. Methods This research systematizes and analyzes information presented in legislative and regulatory documents and in literature covering issues of operations of the Russian entities’ overseas representative offices. Using the method of comparative analysis of accounting options and the case study of the most common transactions made by overseas representative offices, we examine the challenging matters of accounting in overseas representative offices of the Russian entities abroad. Results The article provides clear recommendations on the way to keep accounting records in overseas representative offices carried in the separate balance sheet, and to arrange cross-balance sheet settlements with the parent company. Conclusions and Relevance We conclude that overseas representative offices that are carried in the separate balance sheet should maintain their accounting records only in compliance with Section IV of Accounting Regulation On Accounting for Assets and Liabilities Denominated in Foreign Currency (PBU 3/2006). The article will be relevant to entities, which want to establish their representative offices outside the Russian Federation.