Article 2. Scope of this Law The Law on Accounting and Financial Reporting

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1. This Law applies to:

individual entrepreneurs;

legal entities, branches, representative offices and permanent establishments of foreign legal entities registered in the territory of the Republic of Kazakhstan in accordance with the legislation of the Republic of Kazakhstan (hereinafter referred to as organizations).

2. Individual entrepreneurs have the right not to carry out accounting (except for the preparation and storage of primary documents) and the preparation of financial statements if the following conditions are met simultaneously::

1) apply special tax regimes for small businesses in accordance with the tax legislation of the Republic of Kazakhstan;

2) they are not registered for value added tax;

3) they are not subjects of natural monopolies.

In case of non-compliance with one of the conditions specified in this paragraph, the individual entrepreneur is obliged to maintain accounting records and prepare financial statements from the month following the month in which such a discrepancy occurred.

An individual entrepreneur who meets the conditions specified in this paragraph and has independently made a decision on accounting and financial reporting, has the right to maintain such accounting from the month following the month in which such a decision was made.

3. Small business entities, as well as legal entities operating exclusively through exchange offices on the basis of a license from the National Bank of the Republic of Kazakhstan for exchange operations with foreign currency in cash, prepare financial statements in accordance with the national standard, unless otherwise provided for in this article.

3-1. Medium-sized businesses, as well as state-owned enterprises based on the right of operational management (state-owned enterprises), prepare financial statements in accordance with the international standard for small and medium-sized businesses, unless otherwise provided for in this article.

3-2. Small and medium-sized businesses, which are organizations engaged in microfinance activities that are not related to organizations of public interest, maintain accounting records and prepare financial statements in accordance with the international standard for small and medium-sized businesses and regulatory legal acts of the National Bank of the Republic of Kazakhstan on accounting and financial reporting.

4. Large business entities and public interest organizations are required to prepare financial statements in accordance with international standards.

Financial organizations (with the exception of organizations engaged in microfinance activities that are small and medium-sized businesses that are not public interest organizations) maintain accounting records and prepare financial statements in accordance with international standards and regulatory legal acts of the National Bank of the Republic of Kazakhstan on accounting and financial reporting.

Special financial companies and Islamic special financial companies maintain accounting records and prepare financial statements in accordance with international standards.

Branches of non–resident banks of the Republic of Kazakhstan, branches of insurance (reinsurance) organizations that are non–residents of the Republic of Kazakhstan, branches of insurance brokers that are non–residents of the Republic of Kazakhstan maintain accounting records and prepare financial statements based on accounting data in accordance with international standards and regulatory legal acts of the National Bank of the Republic of Kazakhstan.

5. By decision of the governing bodies that approved the accounting policy:

1) the organizations specified in paragraph 3 of this Article have the right to prepare financial statements in accordance with international standards or the international standard for small and medium-sized businesses;

2) the organizations specified in paragraphs 3-1 and 3-2 of this article have the right to prepare financial statements in accordance with international standards.

The Law of the Republic of Kazakhstan dated February 28, 2007 No. 234.

This Law regulates the accounting and financial reporting system in the Republic of Kazakhstan, establishes the principles, basic qualitative characteristics and rules of accounting and financial reporting.

President

Republic of Kazakhstan

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