Reporting from Ukraine to a foreign parent: what the group needs

A Ukrainian subsidiary or representative office almost always reports twice: once to the Ukrainian authorities under local rules, and once to the parent for consolidation. These two sets of numbers are not the same, and the gap between them is where most of the friction lives. Here is what a group normally asks for and what it takes to produce it from Ukraine.

What the group actually needs

In practice a parent asks for four things, in this order of insistence:

• A reporting package in the group’s format and chart of accounts, usually monthly or quarterly, in the group’s presentation currency.
• Intercompany balances and turnover that agree with the counterparty entity to the cent, because anything unmatched blocks consolidation.
• Disclosures: related party transactions, leases, provisions, contingencies, and increasingly the war-related items, going concern and asset impairment.
• Support for the group auditor: answers to the group audit instructions, sample documents in English and, sometimes, an assurance report from a local auditor.

Why local numbers do not simply become group numbers

Ukrainian accounting standards and IFRS diverge in places that matter for a group package. The most common adjustments are leases, revenue recognition timing, provisions for vacation pay and bonuses, impairment of receivables, foreign exchange differences on intercompany balances, and the treatment of transferred fixed assets. None of them is exotic; they are simply not recorded the same way in the local ledger.

There are two ways to bridge the gap. Either the local books are kept so that both sets can be produced (a parallel or extended chart of accounts), or the local statements are converted at each reporting date. The first costs more per month, the second costs more per reporting period and carries more risk of error under time pressure.

The calendar is the hardest part

Group deadlines are usually set in working days after month end, and they rarely allow for the Ukrainian reporting calendar. Payroll taxes attach to the pay date, VAT returns have their own dates, and the annual statutory package has its own deadlines: audited statements are published by 30 April for public interest entities and public joint stock companies, and by 1 June for large companies that are not securities issuers.

The practical answer is a written closing calendar agreed by both sides, with a cut-off date for input from the business and a fixed date for the package. Without it, every month is a negotiation.

The electronic filing format

Companies that prepare IFRS statements in Ukraine also file them in a single electronic format, iXBRL, based on the national taxonomy. That obligation covers public interest entities, public joint stock companies, extractive industry companies and companies in activities listed by the Cabinet of Ministers. If your Ukrainian entity is in that group, the reporting package and the statutory filing are two separate deliverables from the same numbers, and both have to be planned. We cover this on the page about IFRS statements and iXBRL filing.

What to hand a group auditor

Group audit instructions normally arrive six to eight weeks before the deadline and ask for materiality, a risk assessment, specific procedures and a memorandum. Preparing for them is a separate piece of work, and it is easier when the local team already keeps documents in English or bilingual form. Practical minimum: contracts, bank statements, payroll summaries and fixed asset registers in a form a non-Ukrainian reader can follow.

Where we fit

We keep the books for foreign-owned companies and representative offices and produce the group package alongside the local one: bookkeeping in Ukraine and IFRS accounting and reporting. Where the local books already exist and only the conversion is needed, that is conversion to IFRS. Reporting and correspondence are in English, and as a member of DFK International we use the same report formats as colleagues in more than 90 countries, which is usually what the group auditor is expecting to see.