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The Law “On Accounting” sets the general requirements on financial reporting and accounting:
- IFRS Standards – It is a mandatory requirement to follow IFRS Standards for public interest entities, more specifically, credit organizations, insurance companies, private pension funds and legal entities with stock market share listings. Entities with: (a) revenue of AZN 120 mln; b)an average of 1,500 employees, and c) a total balance sheet of AZN 300 mln are also considered as public interest entities.
- National Standards – Commercial entities must either follow IFRS or the National Accounting Standards for Commercial Organizations (NAS) which are largely drafted according to IFRS.
- Simplified Accounting Rules – Small and medium sized entities (SME) are allowed to follow simplified accounting rules approved by the Ministry of Finance. Besides, they can also choose to follow NAS.
Securities Market – Under the Civil Code, stocks and bonds are investment securities which are principally traded in primary and secondary markets.
Since 2015, changes to the Civil Code and adoption of the new Law on Securities Market brought many changes in the structure of securities market. Under the Civil Code securities are a document recognizing contractual relations between the issuing company and the owner. Securities can be uncertified and registered electronically.
Investment securities are issued publicly or privately. Public offering is an offer to more than 50 people or offer through media. Initial Public Offering of investment securities is subject to approval by the FMSA. Initial Public Offerings and public offerings of derivatives are to go through stock exchange.
Securities are registered at the National Depository Centre under the FMSA. Trading with the securities in the primary and secondary markets is subject to change of register at the National Depository Centre.
Both in primary and secondary markets, securities can be traded through investment companies. Investment companies are organized in the form of joint stock companies and licensed by the FMSA.
