General information about the specifics of accounting for charitable aid can be found here.
Specifics of accounting for grant funds received by the institution in foreign currency
A grant for an institution is a non-repayable monetary aid, as no goods, works or services are provided in exchange for the funds received. However, the terms of the grant usually require certain outcomes to be achieved and reporting to the donor.
If the grant is received in foreign currency from abroad, it can be recognised as external gratuitous aid — income from non-exchange transactions (under NAP(S)BODS 124 “Income”).
According to Clause 1 of Section II of NP(S)BODS 130 “Impact of Changes in Foreign Exchange Rates”, foreign currency transactions during initial recognition are reflected in the reporting currency at the exchange rate of the National Bank of Ukraine at the beginning of the day on which the transaction was made.
According to Clause 10 of Section III of the Regulation on Establishing the Official Exchange Rate of the Hryvnia against Foreign Currencies..., approved by Resolution of the Board of the National Bank of Ukraine No. 148 dated 10 December 2019, the official exchange rate of the hryvnia (UAH) is valid throughout the entire business day following its establishment.
After opening a bank account for foreign currency transactions, the administrator or beneficiary of budget funds must submit a bank statement on the opening of the account to the Treasury (Clause 11.1 of the Procedure for Treasury Services for Local Budgets, Order of the Ministry of Finance No. 938 dated 23 August 2012, hereinafter Procedure 938).
The following subaccount should be used to account for these funds:
Dt 2311 “Current bank accounts”
If grant funds are to be used in the current reporting period, they should be recognised as revenues for non-exchange transactions and recorded on subaccount 7511 “Revenues for non-exchange transactions”:
Dt 2311 “Current bank accounts”
Kt 7511 “Revenues for non-exchange transactions”
If the funds are to be used in the next year (e.g. 2026), these revenues are considered to be deferred revenues and should be recorded on subaccount 6911 “Deferred revenues”.
These transactions are reflected in the cumulative statement of cash flows of the special fund (Memorial Order 3), in accordance with Order of the Ministry of Finance No. 755 “On Approval of Standard Forms of Memorial Orders...” dated 8 September 2017.
On the date of the transaction that changes the monetary item in foreign currency, as well as on the balance sheet date (30 September 2025 and 31 December 2025), exchange rate differences on monetary items are determined (Clause 4, Section II of NAP(S)BODS 130). In other words, the difference between the valuations of the same currency amount when the exchange rate changes is determined:
- If the exchange rate increases, there is now a positive exchange rate difference, which is reflected as part of other revenues for exchange transactions (subaccount 7411 “Other revenues for exchange transactions”).
- If the exchange rate decreases, there is now a negative exchange rate difference, which is reflected as part of other expenses from exchange transactions (subaccount 8411 “Other expenses from exchange transactions”).
These business transactions are reflected in accounting under Clause 5.23 of the Standard Correspondence.
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Accrued exchange rate difference on funds in the foreign currency account (in cash): |
Debit account |
Credit account |
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if the exchange rate increases |
2311 “Current bank accounts” |
7411 “other revenues for exchange transactions” |
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if the exchange rate decreases |
8411 “Other expenses from exchange transactions” |
2311 “Current bank accounts” |
When performing transactions in foreign currency, administrators of budget funds should draw up a Certificate of Foreign Currency Transactions. Its form is approved by Annex 41 to the Procedure for Treasury Services of the State Budget for Expenses, approved by the Order of the Ministry of Finance No. 1407 dated 24 December 2012 (Clause 11.3 of the Procedure 938).
The certificate is to be submitted in two copies — in hard copy or electronically — to the Treasury within three banking days of the month following the reporting month, separately for each type (code) of foreign currency.
In accordance with the Procedure for Filling Out Financial Reporting Forms in the Public Sector (Order of the Ministry of Finance No. 307 dated 28 February 2017), if the funds received are accounted for as deferred revenues, the balances of foreign currency funds on current accounts in banks should be reflected in the financial statements in the UAH equivalent — in the Balance Sheet (form No. 1-ds) under the following items:
- Assets: line 1177 “Funds of budgets and other clients on accounts in banking institutions, including in foreign currency”;
- Liabilities: line 1700 “Deferred revenues”.
According to the Procedure for Preparation of Budget Reports by Administrators and Beneficiaries of Budget Funds, Reports by Compulsory State Social Insurance Funds (Order of the Ministry of Finance No. 44 dated 24 January 2012, hereinafter Procedure 44), quarterly and annual budget reports should show the amounts of foreign currency funds received, in particular in the Report on the Receipt and Use of Revenues Received from Other Sources of the Institution’s Own Revenues (Form 4-2м).
In addition, the balances of foreign currency funds on current accounts opened in banks in the name of administrators of budget funds are indicated in the Certificate of Foreign Currency Balances approved by Annex 12 to Procedure 44.
The information in the Certificate is generated on the basis of balance confirmations provided by banks using forms established by them. A copy of the balance confirmation provided by the bank should be attached to the annual budget report.
