Writing-off exchange rate differences in 2016 may improve financial reporting in Belarus

On March 30^th, 2016, the president signed a decree No 114 aimed at writing-off exchange rate differences in 2016 as future expenses until December 31^st, 2017 in order to improve enterprises’ financial performance. Writing-off exchange rate differences was used twice in 2015 following significant depreciation of the Belarusian rouble. In January 2016, when BYR slumped by 11%, economic losses totalled BYR 16.4 trillion. Thanks to writing off exchange rate differences, nominal losses in the economy and the bulk of loss-making enterprises should reduce in number, while proceeds from income tax would increase. In addition, amid lower interest rates on loans, enterprises’ access to loans would improve. Overall, demand for shares of Belarusian enterprises on foreign markets is unlikely to enhance, for thanks to the decree their real financial health would be impossible to assess.