A reporting period is the time interval for which an organization collects, verifies, and reports indicators in a specific reporting form. It cannot be determined uniformly for all reports: an accountant in Kazakhstan must refer to the regulatory legal act that approves the form, reporting frequency, submission deadlines, and completion rules for the relevant report. The set of indicators and the method of reporting them depend on the type of reporting. This article considers the reporting period in relation to the reporting of organizations engaged in microfinance activities.
What the Reporting Period Means for an Accountant
The practical significance of the reporting period is that it sets the time boundaries for the data included in the report. An accountant must distinguish between:
- transactions carried out during the period itself;
- balances determined at the beginning or end of the period;
- agreements that were concluded, remained in effect, or terminated during the period;
- information reported for a period or as of a specific reporting date.
Therefore, the phrases “for the reporting period” and “as of the end of the reporting period” are not equivalent. The former refers to transactions, events, or other indicators within the specified interval. The latter indicates the status of an indicator as of the end date of that interval.
The period, submission deadline, and set of indicators must be determined separately for each form and under its current completion rules. There is no uniform reporting-period duration for all organizations and all types of reporting.
Tax reporting should be distinguished from sector-specific reporting by microfinance organizations. Tax reporting comprises tax forms that a taxpayer or tax agent prepares and submits to the tax authority to fulfill tax obligations (Article 112 of the Tax Code of the Republic of Kazakhstan). The rules governing a sector-specific report do not, in themselves, determine the tax period.
Reporting Period in the Reporting of Microfinance Organizations
Under the reporting rules for organizations engaged in microfinance activities, the reporting period is used as the boundary for selecting agreements and transactions. According to paragraph 5 of the notes to the relevant form, it covers information on the principal under microcredit agreements that were concluded during the reporting period, remained in effect during it, or terminated during it. The form also includes the prescribed information on loans transferred or assigned to collection agencies.
Paragraph 6 of the notes provides for reporting data on the loan portfolio, including the amount of microcredits issued, weighted average nominal and effective interest rates, principal repayments, and transactions that affected changes in the portfolio. The data are broken down by the categories of borrowers, regions, and industries specified in the form.
To prepare the report correctly, the definitions and procedure for completing the indicators must be taken into account:
- under paragraph 7, principal means the outstanding debt excluding interest, overdue interest, any discount or premium, impairment allowance, and penalties;
- under paragraph 8, the loan portfolio includes all types of loans to customers and similar transactions;
- under paragraph 11, principal balances are reported separately at the beginning and at the end of the reporting period.
Consequently, generating only the turnover for the selected interval is insufficient to complete the form. Opening and closing balances, movements in principal, and the set of agreements to be included in the report must be checked separately.
What Data to Include and How to Check It
Before completing the form, it is useful to prepare a working list of indicators and determine the relevant time boundary for each one: a period or a reporting date. One indicator may characterize transactions during the period, while another may represent the balance at its beginning or end.
Reporting on online microcredits for the reporting period includes, among other things, the number and amount of microcredits granted, reports of fraud submitted to law enforcement agencies, and the actions prescribed by the form in relation to microcredits involving identified instances of fraud. Debt indicators and information on the accrual of interest or penalties are reported as of the date and in the composition expressly established by the relevant rows and notes to the form.
When preparing the data, the accountant should:
- Identify the specific reporting form and the applicable version of the rules.
- Record the beginning and end of the period in accordance with the reporting frequency of that form.
- Select agreements on the prescribed grounds: conclusion, validity, or termination of the agreement during the reporting period.
- Separate turnover for the period from balances as of the specified reporting date.
- Verify the composition of principal and exclude amounts that, according to paragraph 7 of the notes, do not form part of the principal.
- Reconcile the classification of borrowers, regions, and types of economic activity with the requirements of the form.
- Perform arithmetic and logical checks of the rows before submitting the report.
If the rules for a specific form require the report to be submitted when there is no information to report, it must be completed in accordance with the procedure established by those rules, including with zero values. Therefore, the absence of transactions should not automatically be regarded as grounds for not submitting a report: the obligation is determined separately for each form.
Frequently Asked Questions
Is the reporting period a calendar year? — Not necessarily. Its duration is determined by the regulatory legal act that approves the specific form, reporting frequency, and submission rules. An annual period cannot automatically be applied to monthly, quarterly, or other reporting.
How does a reporting period differ from a reporting date? — A reporting period covers the interval for which transactions and events are reported, while a reporting date records the status of indicators at a specific point in time, such as at the end of that period.
Should an agreement that terminated during the reporting period be included? — Yes, for the microcredit form under consideration: paragraph 5 of the notes covers agreements concluded, in effect, or terminated during the reporting period.
What should be reported when there are no transactions? — If the rules for the form require its submission when there is no information to report, the report must be completed in accordance with the prescribed procedure using zero values. The submission obligation and completion procedure are determined separately for each form.
Can interest and penalties be included in the principal? — Under the definition provided in paragraph 7 of the notes to the form under consideration, interest and penalties are not included in the principal. In other rows of the form, such amounts are reported only as part of an indicator expressly specified by its name and completion rules.
Sources
- Amendments to the List, Forms, and Reporting Deadlines for Organizations Engaged in Microfinance Activities
- Rules for the Submission of Reports by an Organization Engaged in Microfinance Activities
- Amendments to Resolution No. 222 of the Management Board of the National Bank of the Republic of Kazakhstan