April 1999

by Philip de Leon

On February 5, the Parliament of Georgia passed the "Georgian Law on Regulation of Accounting and Reporting." The major principles of the law are as follows:

1. International Accounting Standards, as promulgated by the International Accounting Standards Committee (IASC), have been fully adopted and made mandatory as the only accounting standards in Georgia for a majority of enterprises. Exceptions are small enterprises, sole proprietorships, and noncommercial enterprises. These entities, however, have the option to choose to perform accounting in accordance with IAS or adhere to a simplified method of accounting. Small enterprises are defined in the "Entrepreneurial Law."

2. A Georgian Accounting Standards Commission has been established with wide representation from the major user groups of financial information. This commission sits under parliament and will have the authority to issue mandatory normative acts. The commission's functions are: (a) approval of Georgian IAS translations and interpretations for implementation, (b) approval of temporary accounting standards (on those issues currently not covered by IAS), and (c) approval of a chart-of-accounts structure based on IAS.

3. There is a two-year phase-in period, with joint-stock companies (public companies) having to comply by January 1, 2000, and other limited liability companies by January 1, 2001.

For more detailed information, contact the Georgian Federation of Accountants and Auditors at (8832) 22-54-19 from within the CIS or +995 (32) 22-54-19 outside the CIS, the USAID's Georgian Accounting Reform Project at (8832) 98-69-82 from within the CIS or +995 (32) 98-69-82 outside the CIS, and visit the IASC website at: www.iasc.org.uk.

Philip de Leon covers finance for BISNIS in Wash., D.C.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)